CONSUMER

Costco’s $1.50 hot dog price is ‘safe’

May 31, 2024, 2:17 PM

Costco's food court and its famous $1.50 hot dog and soda combo meal....

Costco's food court and its famous $1.50 hot dog and soda combo meal. (Patrick T. Fallon/AFP/Getty Images via CNN Newsource)

(Patrick T. Fallon/AFP/Getty Images via CNN Newsource)

(CNN) — Costco’s new chief financial officer has a reassuring message for inflation-weary customers: don’t worry about the price of the $1.50 hot dog-soda combo.

“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” Costco CFO Gary Millerchip said on an earnings call with analysts Thursday. It was Millerchip’s first earnings call with analysts since taking over for Richard Galanti, Costco’s colorful finance chief of nearly four decades and the longest-serving CFO of a major US public company.

With Costco’s leadership change — and other longtime deals like Trader Joe’s 19-cent bananas and Planet Fitness’ $10 membership ending amid rising inflation — some had speculated about the future of Costco’s $1.50 hot dog. The price has remained the same since 1985.

If Costco’s hot dog deal kept pace with inflation, it would be three times as expensive today — nearly $4.50. But Costco’s $1.50 combo is a strategic decision, known as a loss-leader: The company is willing to lose money selling the hot dogs at that price as long as it helps Costco draw in and retain customers.

It’d be an odd time to raise prices, anyway. Other companies, such as Walmart and Target, have been cutting prices on thousands of items to draw in shoppers who are increasingly fed up with rising costs.

Costco is testing out a new system for entering stores

The $1.50 hot dog is a powerful marketing tool for Costco and is synonymous with Costco’s brand.

“I know it sounds crazy making a big deal about a hot dog, but we spend a lot of time on it,” Costco co-founder Jim Sinegal told the Seattle Times in 2009. “We’re known for that hot dog. That’s something you don’t mess with.”

Sinegal also famously once said, “If you raise the effing hot dog, I will kill you. Figure it out,” according to former CEO Craig Jelinek.

Costco offsets hot dog losses by increasing prices of pizzas and other items at its food courts and cutting costs.

It also recently added chocolate chip cookies to its food court menu. The $2.49 double chocolate chunk cookie has been a “continued success,” Millerchip said Thursday.


The-CNN-Wire™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

KSL 5 TV Live

Consumer

A SkyWest Airlines jet approaches Salt Lake International Airport on Sept. 24, 2022. SkyWest announ...

Carter Williams, KSL.com

Flights between St. George and Los Angeles to resume after 4-year delay

St. George-based SkyWest Airlines announced this week that daily flights between St. George Regional Airport and Los Angeles International Airport will return this fall, through United Express, one of SkyWest's different airline service partners.

1 day ago

FILE - A line of unsold 2018 Cooper Clubmen sit in a long row at a Mini dealership, March 30, 2018,...

Wyatte Grantham-Philips, AP Business Writer

Car dealerships are being disrupted by a multi-day outage after cyberattacks on software supplier

Car dealerships across North America have faced a major disruption this week.

2 days ago

Snelgrove Ice Cream, an iconic Salt Lake City brand, is making its comeback. (Snelgrove Family)...

Eliza Pace, KSL TV

Snelgrove Ice Cream, an iconic Salt Lake City brand, is making its comeback

In 1929 Snelgrove Ice Cream was founded by Charles Rich Snelgrove in Salt Lake City, Utah. Now Lindsay Snelgrove seeks to continue the legacy.

2 days ago

Salt Lake County Mayor Jenny Wilson, talking about the proposed changes that are happening to downt...

Carole Mikita and Michael Houck, KSL TV

‘This plan is ambitious’: Salt Lake County Mayor Wilson talks about the revitalization of Salt Lake City

Salt Lake County Mayor Jenny Wilson spoke to KSL TV about all the proposed changes that could hit downtown Salt Lake City.

3 days ago

A silhouetted man sitting in a chair on a phone call....

Matt Gephardt and Sloan Schrage, KSL TV

New federal data shows favorite methods of scammers targeting Utahns

Over 26,200 Utahns reported getting hit by fraud to the Federal Trade Commission last year. And one out of five of those Utahns lost money to imposters.

3 days ago

Trucks have been delivering a nonstop stream of packages from Temu to a home in the western suburbs...

Tara Molina, WBBM

An Illinois family keeps getting packages they never ordered from Temu

Trucks have been delivering a nonstop stream of packages from Temu to a home in the Illinois suburbs lately, but the family is not ordering anything.

3 days ago

Sponsored Articles

Photo courtesy of Artists of Ballet West...

Ballet West

The rising demand for ballet tickets: why they’re harder to get

Ballet West’s box office is experiencing demand they’ve never seen before, leaving many interested patrons unable to secure tickets they want.

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 internet safety tips for kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why printer security should be top of mind for your business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light up your home with these top lighting trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for hassle-free computer repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Costco’s $1.50 hot dog price is ‘safe’