Surprise: Dollar Tree’s $1.25 price strategy is actually working | CNN Business

When Dollar Tree said it would raise prices to $1.25 after 35 years sticking to $1, some fans protested and industry analysts questioned the decision.

A year later, the controversial move appears to be paying off.

Higher prices have added to Dollar Tree’s sales. The switch has also allowed the company to introduce merchandise it couldn’t previously sell because of its $1 price constraint, helping it draw new shoppers. Other companies have also raised prices, so Dollar Tree has been shielded from major customer blowback.

Sales at Dollar Tree stores increased 8.6% last quarter compared to a year ago, the company, which also owns Family Dollar, said Tuesday. Family Dollar sales increased 4.1% last quarter.

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