Dollar stores are fighting over 1 dollar

But more recently, Dollar General has been placing more $1 items at prime store locations and adding tags highlighting those prices. The company said this week that it is also considering increasing the variety of items priced at $1.

“We’re really headed for the one dollar price point,” CEO Todd Vasos said on a call with analysts Thursday. Dollar General ‘really pays for it [$1] Part of the business because I think our customers are going to need us more there. “

Vasos said that Dollar General’s major customers, many of whom have fixed incomes, often run out of money at the end of the month. Offer $1 merchandise “bridges that last her a few days” and help her “complete her month.”

“Difficult times for the consumer usually mean they need us more,” Vasos said.

As Dollar General ramped up its $1.25 strategy, the Dollar Tree moved away from it — even though the $1 prices had been Dollar Tree’s business identity for 35 years and its decision to move to $1.25 alienated customers.

But the highest rate of inflation in 40 years forced the Dollar Tree to make changes. It raised prices because its business was under pressure by having to keep everything under $1, with rising costs of labor, transportation, fuel, merchandise and freight slashing the company’s profits.

The jury is still out on the impact of the change. Earlier this month, Dollar Tree said prices of $1.25 are helping drive sales, but it also indicated that shoppers are buying fewer items as a result. Some Dollar Tree loyalists also protested the price hike.