Since Family Dollar sells at multiple price points, they will have the ability to control the upper price points as commodity prices change. For example, if Milk prices go much higher or if they should head lower for a brief time, Family Dollar can easily adjust with the market price using the POS systems and daily feedback. There is no reason for Family Dollar to absorb any of the increases since they have the ability to move their price according the area of the country or the supply and demand of the consumables that are being sold. Go into a Family store to check their price points, even though the prices are below most all retailers and grocers, they have price and selection. If you should want to purchase shampoo at a dollar, it is there; if you should want to step up to a name brand shampoo at a low price it is there as well.
Although Family Dollar Stores does not cap its prices at $1, the company still has limited ability to increase prices. Because of this, any price increases stemming from increases in commodities' prices, labor costs, or inflation must be partially or fully absorbed by the company.