Discount retailer Five Below spread rapidly across much of the U.S. over the past several years, its popularity fueled by one key selling point — most of its items cost $5 or less.

The “less” part, though, is becoming less certain as post-pandemic shortages and inflation lash the economy. According to Thinknum data, the Philadelphia-based chain has been gradually increasing prices and cutting online inventory over the past year. The average item now goes for $4.69, about 62 cents, or 15% higher than what it cost a year ago.

Over the past month, the average price has continued to tick up by a few cents, suggesting that possibly back-to-school shopping is a factor. Along with clothes, candy, books and household items, the retailer sells a wide variety of school supplies.

It remains to be seen whether rising prices will affect the chain’s massive growth trajectory. In August 2017, Five Below had 627 stores nationwide. Now it has 1,160 stores in 39 states.

Surprisingly, Five Below expanded significantly during COVID, adding 269 stores and increasing its footprint across the U.S. by about 30%, since the beginning of 2020.

Price increases are of course affecting consumers in lots of other areas besides discount stores. Supply chain capacity, which shrunk during lockdowns, is now overwhelmed just as demand for all sorts of items is surging.

Both new and used vehicle prices have jumped by thousands of dollars. Food costs are up, rents are rising in many metro areas, and homes are selling for well above their asking prices.

Shortages of household products have also led to scalping by third-party sellers on websites like Amazon and eBay.

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