Dollar Tree shoppers aren't scared off by its $1.25 prices

The retailer said that shoppers aren't deterred by the $1.25 price increase.

According to CEO Mike Witynski on Thursday's results call, Dollar Tree delivered its best quarter ever.

A move to a $1.25 price point helped to boost sales and margins, he said.

We're seeing an increase in sales as the new greater value products hit our shelves, and the shoppers are responding favorably.

Dollar Tree's comparable sales increased by 11.2% in the quarter. The number of transactions decreased by 3.6%, but the value of each transaction rose by 15.4%, Witynski said.

Despite retailers across the board imposing price increases, analysts believe the more flexible pricing will give... 

...customers more choice by allowing Dollar Tree to offer a broader variety of products and new brands.

Witynski said Dollar Tree plans to expand Dollar Plus, its range of products priced at $3 and $5, to another 790 Dollar Tree stores during the quarter.

Dollar General also encourages shoppers to buy more expensive items. The company plans to open more stores under its Popshelf brand, 

...which sells items at higher prices, some costing more than $20. A concept targeted at wealthy young suburbanites focuses on non-food items.