Image copyright Getty Images Image caption The company can raise prices by 5% for most merchandise
American discount retailer Dollar Tree has decided to raise prices on most items at its stores in the US and Canada by a penny, as part of its biggest price increase in the company’s history.
It will raise prices by about 5% on most items, with a majority of items costing more than $1 and a few at less than 50 cents.
The company is also looking at other changes as it attempts to keep pace with increasing costs.
Dollar Tree will raise the price of a 6-pack of 11-inch rolls of toilet paper to $3.35 from $3.25.
“We recognize that the cost of doing business is rising, especially as food and labour costs rise, but we also want to make sure we remain competitive,” said Chairman and Chief Executive Officer Bob Sasser.
“We’ve developed and tested new price points, expanded our assortment to deliver a richer consumer value proposition, and redesigned store layouts to provide more compelling prices on more of our merchandise.
“These efforts, along with these important price increases, will enable us to deliver meaningful value to customers.”
Image copyright Getty Images Image caption In recent years, it has been moving away from selling a massive amount of goods for the same price
The company’s board has authorised a further increase of up to 15%, or an additional 10% of the current prices, at the end of next year if need be.
The increase means that the company, which is owned by Dollar Tree, will be able to charge prices higher than the inflation rate of about 2% in the US.
Its biggest price increase was in 2010, when it raised prices by 12% across the board.
Last year, it raised prices by an average of 3%, according to Trefis, which tracks the business.
In recent years, the retailer has been trying to cut its reliance on discounts to attract customers and move more toward a broad assortment of merchandise.
In response, it has cut deals for customers and formed partnerships with higher-end brands.