By Abha Bhattarral
Washington Post
For more than 30 years, Dollar Tree has made a singular promise to its customers: “Everything’s $1.”
Not anymore.
The Chesapeake, Va.-based retailer, which relies heavily on cheaply made goods from China, said this week that it had begun testing higher prices at some of its stores. Soon, more than 100 Dollar Tree stores around the country will sell items that cost up to $5.
That price increase, spurred by activist investors, comes as the company braces for millions of dollars of new tariff-related expenses that analysts say will disproportionately affect the chain and its lower-income shoppers. The dollar store industry is dominated by two companies: Dollar General and Dollar Tree, which also owns Family Dollar.
Dollar Tree “is the ‘poster child’ for tariff impact,” Judah Frommer, an analyst for Credit Suisse, wrote in a recent note to clients. “China is the source of a substantial majority of the company’s imports.”
The company, he added, imports about 40 percent of its merchandise directly from China. It also sells products from two dozen other countries, including Mexico, leaving it vulnerable to additional new tariffs being threatened by President Trump. Trump took to Twitter late Thursday to say Mexican imports would be subject to a 5 percent tax beginning June 10.
“At the end of the day, these tariffs are a tax on U.S. consumers, and they disproportionately affect the dollar store consumer who is living paycheck to paycheck,” said Anthony Chukumba, an analyst for Loop Capital Markets in Chicago.
Retailers across the country have warned that prices could rise by as much as 20 percent this year as they face higher costs on items such as shampoo, suitcases and salmon.
American families will pay nearly $800 more a year on everyday items, including cribs and toilet paper, as a result of the Trump administration’s tariffs on Chinese imports, according to a report by the Trade Partnership, a Washington-based research-and-consulting firm. That number will probably rise even more if similar taxes are levied on Mexican imports.
The chain’s largest competitor, Dollar General, said this week that it will probably have to mark up prices to keep up with tariffs.
“We will do everything we can to minimize the impact of tariffs on our customers,” John Garratt, Dollar General’s chief financial officer, said on an earnings call Thursday. “But even with these efforts, we believe our shoppers will be facing higher prices as 2019 progresses.”
For more than 30 years, Dollar Tree has made a singular promise to its customers: “Everything’s $1.”
Not anymore.
The Chesapeake, Va.-based retailer, which relies heavily on cheaply made goods from China, said this week that it had begun testing higher prices at some of its stores. Soon, more than 100 Dollar Tree stores around the country will sell items that cost up to $5.
That price increase, spurred by activist investors, comes as the company braces for millions of dollars of new tariff-related expenses that analysts say will disproportionately affect the chain and its lower-income shoppers. The dollar store industry is dominated by two companies: Dollar General and Dollar Tree, which also owns Family Dollar.
Dollar Tree “is the ‘poster child’ for tariff impact,” Judah Frommer, an analyst for Credit Suisse, wrote in a recent note to clients. “China is the source of a substantial majority of the company’s imports.”
The company, he added, imports about 40 percent of its merchandise directly from China. It also sells products from two dozen other countries, including Mexico, leaving it vulnerable to additional new tariffs being threatened by President Trump. Trump took to Twitter late Thursday to say Mexican imports would be subject to a 5 percent tax beginning June 10.
“At the end of the day, these tariffs are a tax on U.S. consumers, and they disproportionately affect the dollar store consumer who is living paycheck to paycheck,” said Anthony Chukumba, an analyst for Loop Capital Markets in Chicago.
Retailers across the country have warned that prices could rise by as much as 20 percent this year as they face higher costs on items such as shampoo, suitcases and salmon.
American families will pay nearly $800 more a year on everyday items, including cribs and toilet paper, as a result of the Trump administration’s tariffs on Chinese imports, according to a report by the Trade Partnership, a Washington-based research-and-consulting firm. That number will probably rise even more if similar taxes are levied on Mexican imports.
The chain’s largest competitor, Dollar General, said this week that it will probably have to mark up prices to keep up with tariffs.
“We will do everything we can to minimize the impact of tariffs on our customers,” John Garratt, Dollar General’s chief financial officer, said on an earnings call Thursday. “But even with these efforts, we believe our shoppers will be facing higher prices as 2019 progresses.”
To fread rest of article, click on link: https://www.washingtonpost.com/business/2019/05/31/trumps-tariffs-are-hitting-countrys-most-vulnerable-dollar-store-shoppers/?noredirect=on&utm_term=.8c25ef0fe031
6 comments:
what a nice truck in that picture
my compliments
y el color que?
lets keep voting for Trump he is making America great again pinche puto
Trump es mi gallo!
so you're a gallina? pendejo
So are you going to seel blood at a higher price?
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