The dollar tree got rid of its individual price point for years. Now, executives say, this gives the retail an advantage because it deals with the customs tariff.
The discount series said on Wednesday that it will face an additional $ 70 million of tariff costs during the second quarter shortly after this spring when it had to pay a fee of 145 % on some imports from China.
The retail seller said that these additional costs can send the dollar profits to the tree per share between 45 % and 50 % for the second quarter. Dollar Tree expects its profits to improve in the last two quarters of its financial year.
Dollaar Tree executive officials have pointed out a constant effort that helps them to recover some of these tariff costs: storing more elements with high prices in their stores.
In 2021, the retail seller said he would raise prices to $ 1.25 and give up the $ 1 price point that you used for years.
Do not plan Dollar Tree to respond to the tariffs by raising prices in all fields. “We don’t see this as a break,” CEO Michael Credon said on Wednesday.
But Creedon pointed to several ways that Tree Dollar is trying to reduce the costs it faces from definitions and increasing other costs, from negotiating with its suppliers to setting the size of an element.
These strategies – and “special” adding the dollar tree to more products that cost more than $ 1.25 – “give us flexibility to ensure that if the customer wants this product, we can get this product to them,” said Creedon.
The dollar tree clients can find products in some stores that cost more than $ 1.25. Creedon said on Wednesday that the company is testing a selection of frozen foodstuffs in some sites ranging from $ 3 to $ 7.25.
“The multi -calorie model also gives the dollar tree a greater range in alleviating the impact of definitions,” said Neil Sonders, Managing Director of Globalda, after the dollar reported on Wednesday’s profits.
CEO Todd Vasus said in a profit call on Tuesday that the general dollar competition series, at the same time, sells nearly 2000 elements “at or less than $ 1 in its stores. Like Dollar Tree, Dollaar General also sells many elements at a higher price.
Executive officials said that the higher prices mean that the dollar tree can provide customers with a wide range of goods, which can by adhering to a $ 1.25 price point.
“There will be more gains from this during the balance of the year,” Sunders said, referring to a multi -horoscope price strategy.
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