DEALS
The reason why Costco doesn’t raise the price of its famous hot dogs
Even with inflation, Costco refuses to raise the prices of its famous hot dogs. This is why the combo has cost $1.50 since 1980.
While some restaurants and fast food establishments struggle to attract new customers, Costo remains faithful to its business strategy and does not plan to raise the prices of its famous hot dogs, which have cost $1.50 since they first appeared on the menu in the 1980s.
The $1.50 hot dog and soda combo has become a hallmark of the fast-food chain’s restaurant offerings. It all began in 1984, when Hebrew National - the original supplier of Costo’s hot dogs - were selling hot dogs out of Costco outlet in San Diego, California.
Sales were strong enough for the the strategy to be implemented in other stores - up until, in 2008, when the company decided to operate its own hot dog factories to reduce supply chain costs. It was the start of a new era: with a food court in each of the branches. The Costco Food Court is where you can now find pizza, cookies, ice cream sundaes and other products.
But have you ever stopped to think why the price of its legendary hot dogs hasn’t gone up in all these years?
This is why Costco doesn’t raise the price of its hot dogs
With current inflation, a hot dog and soda combo would cost around $4.40. However, the company is keeping the price of its distinctive brand intact for one simple reason: to be loyal to its customers in order to maintain the consumer culture that they have worked hard to create over the years.
To keep hot dog prices stable, the company has had to take other measures, such as raising the cost of other fast-food staples, although these remain relatively low compared to prices at other establishments. According to Gary Millerchip, the company’s chief financial officer, revenue from other parts of Costco is what helps keep food court prices low.
“It’s a good PR move for Costco not to change this price,” explains Jamie Loftus, author of Raw Dog: The Naked Truth About Hot Dogs. “It’s like saying, ‘No, we’re not going to change the price. We’ve got your back.’”
In fiscal year 2023 alone, the company recorded nearly $200 million in hot dog and soda combo sales.