Why Are Prices Going Up? Dollar Tree Isn't The Only Store Up Charging Customers

Consumers are not mistaken -- prices for everyday items have indeed been climbing. Everything from produce, to meat, cheese, wine, clothes, and gas have all seen an uptick, as the Consumer Price Index has increased 5.3%, according to the Bureau of Labor Statistics.

Price increases have been the result of inflation caused by pandemic-related demand. Economists believe the trend will stay for the next two years as they have forecasted an annual increase of 2.58% through 2023. The pandemic has caused supply lines to slow, causing bottlenecks and delays which have given companies a lot of trouble trying to fill their high rates of demand. The pandemic has also caused people to hoard items such as paper towels, toilet paper, and pasta.

Annual inflation reached 4.2% in July, the highest in three decades. Yet, consumer spending rose 0.8% between July and August./p>

Discount retailer Dollar Tree has responded to the conditions by raising the price of some items to $1.25 or $1.50. Last month, the chain said that rising shipping costs would take a $1.50 to $1.60 bite out of its per-share profits this year, prompting the price increases.

“For decades, our customers have enjoyed the ‘thrill-of-the-hunt’ for value at one dollar - and we remain committed to that core proposition - but many are telling us that they also want a broader product assortment when they come to shop,” said CEO Michael Witynski in a prepared statement.

Witynski promised customers that the retail chain would still hold true to its promise “whether it’s $1.00, $1.25, or $1.50.”

Kroger also announced they will be raising their prices. Gary Millerchip, the company's chief financial officer and senior vice president, said the retailer would be "passing along higher costs to the customer where it makes sense to do so." Kroger reported price increases on produce, deli, bakery, and floral sales amid higher supply chain costs.

Albertson’s Cos., which owns chains Albertsons, Jewel Osco, and Safeway, reported price increases after a strong 2020, in which revenue climbed to nearly $70 billion after nearly $62.5 billion in 2019.

Proctor & Gamble and Coca-Cola also announced price increases in order to offset rising commodity costs. Competitors PepsiCo, General Mills, and J.M Smucker also have raised prices. Unveiler, owner of popular companies such as Ben & Jerry’s, Lipton, Hellmann’s, and Popsicle, raised their prices by 1.6% over the summer.