Dollar Tree, which raised its base price to $1.25 three years ago, could be facing another price increase in 2025.
The discount retailer, which kept prices for many items at $1 for 30 years (though now charges as much as $7 for some items), hinted on an earnings call Wednesday that it was prepared to increase prices, if necessary, as retailers try to determine the impact of Donald Trump’s vow to impose tariffs on goods from a number of countries.
“We've got multi-price,” said chief operating officer Mike Creedon. “Multi-price gives us the ability to flex where we need to if a certain product becomes something that we've got to move in the market to be competitive.”
Another option, Creedon said was to “eliminate the product altogether,” though since the imposition of tariffs several years ago, Dollar Tree has worked to set up alternate countries of origin for key products.
Trump has threatened to impose tariffs of 25% on products from Mexico and Canada and said he will increase existing tariffs on goods coming from China by 10%. Despite claims that those countries will pay the additional taxes, they are most commonly passed along to the consumer.
“While the situation remains fluid and the exact nature, scope, and eventual timing of any new tariffs is not yet clear, we are prepared to act on multiple fronts,” Creedon added.
Dollar Tree, which is in the midst of selling off its Family Dollar chain, is a company investors are watching as tariff threats loom, as it currently imports an estimated 40% of its products from China. Five Below is also under the microscope, as an estimated 60% of its products come from China.
Both companies were able to handle the tariffs of 2019 and 2019, but analysts note neither are performing as well operationally now.
