It's not really 99 Cents 'Only'

A 99 Cents Only store in Bakersfield, Calif.

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Scott Jagow: When you think about it, it's pretty amazing that dollar stores still charge a dollar. A century ago, they were five and dimes, but five cents has inflated to more than a dollar. And prices feel like they're going up every day now. Dollar stores are starting to get a little creative with their pricing. Today, we'll get a profit report from the 99 Cents Only chain. Renita Jablonski has more.


Renita Jablonski: Hector Santos says he shops at a 99 Cents Only store in LA because he saves money. But in recent weeks, he noticed a change in some prices.

Hector Santos: Well, they don't really go up higher than 99 cents, but instead of two for 99, maybe they charge you 59 cents for each.

Patrick McKeever, an analyst with MKM Partners, says the fancy name for that is "flexible pricing strategy."

Patrick McKeever: They are pricing some items below 99 cents. That's actually helping them offset some of the cost increases that they are seeing from their vendors.

McKeever says inflation is causing a lot of retailers to raise prices. But with a name like 99 Cents Only, you have to get creative.

McKeever: Six cans at 99 cents was great, and four cans at 99 cents is still great.

If customers still feel they're getting a deal, he says they'll keep coming back.

In Los Angeles, I'm Renita Jablonski for Marketplace.

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