(WFLA/CNN) – Have you ever wondered how the Dollar Tree is still able to continue selling everything in its stores for just a single dollar after all these years?
According to one activist investor, it’s because the store has lowered the value of the products it sells.
When you think about it, they sort of have to in order to keep up with inflation.
A dollar’s worth of merchandise in 1986 would cost you roughly $2.30 today.
That’s according to Starboard Value Hedge Fund CEO Jeffrey Smith.
He says it’s time for Dollar Tree to raise its prices.
Starboard Value recently took a 1.7 percent stake in the bargain retailer and wants to work with Dollar Tree on its pricing strategy.
Dollar Tree responded politely to the suggestions, but it appears likely to push back on any proposed changes.