Call It The "99.99 Cents Only Store"

As had been hinted at last month, the 99 Cents Only store is raising prices for the first time in its history.

The change will be minimal, however. According to the L.A. Times, prices are rising from 99 cents to 99.99 cents -- in other words, a dollar.

That should put fans of the store at ease; much larger price increases had been rumored. The price increases take effect later this month.

The Times writes:

"We've absorbed it for as long as we can and as hard as we can, but we've reached a point where we can't absorb it anymore, and we have to do something," said Chief Executive Eric Schiffer. "This will give us plenty of breathing room."

Based on last year's sales, Schiffer estimated that the chain would take in an extra $12 million at the cash register.

Industry analyst Karen Short said changes like this were often essential.

"We've had a pretty abnormal inflationary period, and sticking to their strategy of 99 cents only becomes more challenging when prices are as volatile as they are," said Short, an analyst with Friedman, Billings, Ramsey & Co.

"Changing prices on items is not an attempt to move away from the strategy of helping the consumer. It's out of necessity."

The announcement was expected after the retailer -- faced with fast-rising inflation, soaring food and fuel prices and a higher minimum wage -- said last month that it was reevaluating its long-standing price strategy after two consecutive quarterly losses.

Founded in 1982 by Chairman David Gold, 99 Cents Only pioneered the single-price retail concept. The chain opened its first store in Los Angeles and has since expanded to 277 locations, mostly in California but also in Nevada, Arizona and Texas...

But capping prices at 99 cents plus tax had become a burden for the retailer, which had to adjust the size or quantity of many of its offerings -- including milk and eggs -- to keep them on store shelves. The strict price strategy also led to the inability to carry some high-demand items, such as butter, on a regular basis.

As much as I love the 99 Cents Only store, there are some things I'd still be leery to buy there -- including 99 cent butter.