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Costco hot dog

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Photo of a Costco hot dog and drink cup
A hot dog and drink combo at Costco

The "Costco hot dog" is a 1⁄4-pound (110-gram) hot dog sold at the international warehouse club Costco's food courts. It is notable for its steady price and cult following as a combo deal with a soda at North American locations since its introduction in 1984.

History

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Photo of a Costco food court
A Costco food court menu, featuring the hot dog and soda combo deal sign

The Costco hot dog was introduced to food courts in 1984,[1] one year after Costco's opening in 1983.[2] The original hot dog was made by Hebrew National,[3] and was sold at a hot dog cart outside a Costco location in San Diego. As of 2018, Costco sold a yearly average of 135 million hot dogs,[4] more than every Major League Baseball stadium combined.[5] In November 2022, Sam's Club, a Costco competitor, reduced the price of its hot dog and soda combo deal to $1.38 in an attempt to compete with the Costco hot dog.[6]

The combo deal

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The product varies across countries; the U.S. version consists of a Kirkland brand wiener, some warehouses selling it with a sesame bun, some selling it with a plain bun.[7] It is sold as part of a combo deal with a 20 U.S. fl oz (590 mL) soda.[8] The soda fountains at the Costco food courts were stocked with Coca-Cola products until 2013, when Costco switched to Pepsi products as a cost savings measure for the combo.[9] In January 2025, Costco CEO Ron Vachris confirmed that they will revert to Coca-Cola products in early 2025. As of April 2025, select locations have already made this change and it should go fully into effect by July 2025.[10][11]

In 2008, Costco began using its own hot dog factories, reducing supply chain costs.[8] A Costco meat processing facility in Tracy, California, that had been around since 2004[12] began producing hot dogs in 2011, and produced both the hot dogs sold in the food court as well as smaller hot dogs sold in packs. The switch also ushered in the usage of non-kosher beef. Another facility was opened in Morris, Illinois in 2018.[13]

Price

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The price was set at $1.50 at its introduction and has remained at $1.50 ever since.[1] As of 2024, the hot dog combo would cost approximately $4.40 if the price were adjusted to match inflation since 1984.[14] In 2022, Costco CFO Richard Galanti stated that Costco intends to keep the combo deal's price constant "forever."[15] Galanti's replacement Gary Millerchip stated in May 2024 that the price is "safe."[16]

Costco hot dog price comparison among countries
Country Made with Price Price converted to USD Source
Australia Pork $1.99 $1.50 [17]
Canada Pork C$1.50 $1.20 [18]
China Pork ¥10.9 $1.70 [19]
Japan Pork ¥180 (8%)
¥184 (10%)		 $1.60 (8%)
$1.70 (10%)		 [20][21]
Mexico Beef $30 $1.50 [22]
New Zealand Pork $1.99 $1.40 [17]
South Korea Pork ₩2,000 $1.70 [23]
Taiwan Pork $50 $1.80 [24]
United Kingdom Beef £1.50 $2.10 [25]
United States Pork $1.50 $1.50 [1]

Cultural impact

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The hot dog and soda combo deal has developed a cult following.[26] Several t-shirt designs are sold online that celebrate the food court sign advertising the combo.[27] In 2009, the Seattle Times asked Costco co-founder (and then-CEO) Jim Sinegal, "If [the price of the hot dog] ever goes up, what will it mean?" Sinegal replied, "That I'm dead."[28]

Craig Jelinek, Sinegal's successor as CEO, revealed in 2018 that he approached Sinegal in 2013 about raising the price of the hot dog combo to $1.75 (equivalent to $2.40 in 2024[29]), saying, "Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends." According to Jelinek, Sinegal replied, "If you raise the effing hot dog, I will kill you. Figure it out." Jelinek instead decided to switch from Coca-Cola products to Pepsi products to keep the combo at $1.50.[4] According to Premier Media Group, the publisher of that story, it was the single most viral story run to date by the company as of 2024.[30]

In 2024, Ron Vachris, Jelinek's successor, was reminded in an interview about Sinegal's now-famous quote about raising the price of the Costco hot dog.[30] Vachris reiterated how Costco has gone to "great lengths" to maintain the prices of its hot dog combo and rotisserie chicken, and promised that raising those prices would not happen on his watch.[30]

Analysis

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Several explanations exist as to why Costco chooses to continue to sell its hot dog combo at an unusually low price point. When asked why the price of the hot dog was significant to him, Jim Sinegal said, "Because everybody talks about it. People look at that hot dog and say a buck fifty, this is unbelievable." He continued, "We're known for that hot dog. That's something you don't mess with."[28]

According to David Fuller, assistant vice president of publishing, "Costco wanted to prove that a business can operate on a fair markup and still pay all of its bills. Holding a price that steady for that long sends a clear message about what is possible when you decide to operate your business model on a 'cost plus' basis instead of a 'what the market will bear' basis." Costco vice-president Bob Nelson stated that "It epitomizes the value that we stand for."[31]

Some commentators and employees have called the hot dog a loss leader, drawing in enough customers to compensate for lost profits.[32] Costco CFO Richard Galanti did not directly confirm or deny this theory, but commented that "Needless to say we aren't making a lot or any" profit on food court products.[33] Some have also theorized that the popularity of the food court, which is located near the entrance at Costco locations, creates a welcoming atmosphere, luring in more customers and encouraging customer retention.[32][34]

See also

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References

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  1. ^ a b c Nowak, Claire (March 26, 2019). "The Real Reason Costco's Hot Dogs Cost $1.50". Reader's Digest. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  2. ^ Gleeson, Scott (September 26, 2022). "Don't worry, Costco commits to $1.50 hot dog and soda combo price — maybe 'forever'". USA Today. Archived from the original on July 7, 2023. Retrieved August 29, 2023.
  3. ^ Rossen, Jake (June 8, 2018). "The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo". Mental Floss. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  4. ^ a b Matthews, Todd (April 18, 2018). "Costco CEO Craig Jelinek on Shareholders, Costco.com, and Hot Dogs". 425Business.com. Archived from the original on August 31, 2023. Retrieved August 29, 2023.
  5. ^ Rossen, Jake (June 8, 2018). "The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo". Mental Floss. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  6. ^ Case, Brendan (August 17, 2023). "Sam's Club's War Against Costco Started With $1.38 Hot Dog Combo". Bloomberg.com. Archived from the original on September 3, 2023. Retrieved August 29, 2023.
  7. ^ Peterson, Lucas Kwan (January 31, 2023). "The Costco hot dog combo has been undercut by Sam's Club by 12 cents. Which is better?". Los Angeles Times. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  8. ^ a b Mae, Angela (June 16, 2023). "How Much Does a Costco Hot Dog Actually Cost Amid Inflation?". Yahoo Finance. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  9. ^ Klineman, Jeffrey (January 31, 2013). "PepsiCo's In The Club… Store, that is, Capturing Costco Food Service Account". BevNET.com. Retrieved September 13, 2023.
  10. ^ Love, Melany (December 20, 2024). "Costco Just Confirmed This Controversial Change to Its Food Court Soda Fountains". Taste of Home. Retrieved May 21, 2025.
  11. ^ Harling, Danielle (March 10, 2025). "Costco Customers: Coca-Cola Products Have Officially Been Spotted At Food Courts". Delish. Retrieved April 29, 2025.
  12. ^ "Costco constructs meat processing plant". FleetOwner. July 1, 2004. Retrieved September 13, 2023.
  13. ^ De Avila, Joseph (July 15, 2022). "Behind the $1.50 Costco hot dog combo that defies inflation". The Virginian-Pilot. Retrieved September 13, 2023.
  14. ^ Treisman, Rachel (June 4, 2024). "Costco hot dogs have cost $1.50 since the 1980s. Here's why prices aren't changing". NPR. Retrieved June 4, 2024.
  15. ^ Vega, Nicolas (September 26, 2022). "'Lightning just struck me': Why Costco's CFO says the price of the $1.50 hot dog and soda combo is 'forever'". CNBC. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  16. ^ Meyersohn, Nathaniel (May 31, 2024). "Costco's $1.50 hot dog price is 'safe' | CNN Business". CNN. Retrieved June 1, 2024.
  17. ^ a b "Costco". www.costco.com.au. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  18. ^ Belmonte, Lisa (September 29, 2022). "Costco Says The Price Of Hot Dogs At The Food Court Will Stay The Same 'Forever'". Narcity. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  19. ^ 丁其. "加拿大Costco热狗全世界最便宜，比中国便宜40%！烧鸡呢？". SuperLife (in Chinese). 星星文化传媒集团. Retrieved May 22, 2025. 而在中国内地的Costo门店，热狗套餐卖10.9 元人民币，按照 2.08 加元，高出接近40%。
  20. ^ In Japan, taking out charges 8% consumption tax while eating in charges 10%.
  21. ^ あひるねこ (April 11, 2025). "【嘘だろ】数年ぶりに「コストコ」に行ってビビったこと → まさか当時のままとは…". ロケットニュース24 (in Japanese). Retrieved May 21, 2025.
  22. ^ Byrne, Matt (August 30, 2022). "Reddit Has Serious FOMO For Costco Mexico's Hot Dogs". Mashed. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  23. ^ 최은경; 이수정 (May 22, 2024). ""가격만 올려봐, 가만 안둬" 코스트코 핫도그 2000원 비밀". 중앙일보 (in Korean). Retrieved May 21, 2025.
  24. ^ "凍漲20年！好市多1經典套餐才50元 資深會員讚：唯一必買". 聯合新聞網 (in Chinese). January 8, 2024. Retrieved May 21, 2025.
  25. ^ Duffy, Kate; Nolan, Beatrice. "We tried a Costco hot dog for the first time. Here's how it compares with the other food court staples on the menu". Business Insider. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  26. ^ Allcot, Dawn (August 5, 2023). "Are These 8 Costco Items With Cult Followings Worth the Hype (and Money)?". Yahoo Finance. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  27. ^ Vegas, Nicolas (June 24, 2023). "Costco's iconic $1.50 hot dog combo has a viral T-shirt design celebrating its cult status". CNBC. Archived from the original on July 17, 2023. Retrieved February 12, 2024.
  28. ^ a b Allison, Melissa (November 15, 2009). "Complete Q&A with Costco founder, CEO Jim Sinegal". The Seattle Times. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  29. ^ 1634–1699: McCusker, J. J. (1997). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States: Addenda et Corrigenda (PDF). American Antiquarian Society. 1700–1799: McCusker, J. J. (1992). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States (PDF). American Antiquarian Society. 1800–present: Federal Reserve Bank of Minneapolis. "Consumer Price Index (estimate) 1800–". Retrieved February 29, 2024.
  30. ^ a b c Stearns, John (July 2, 2024). "Ron Vachris: Costco's New CEO and Culture Keeper". South Sound Business. Premier Media Group publishes both 425 Business and South Sound Business. This interview transcript implies that Vachris was probably being interviewed for 425 Business and then Premier ran the story in South Sound Business instead.
  31. ^ Ihnat, Gwen (April 11, 2018). "Costco loses money every time it sells a $1.50 hot dog and doesn't care". The Takeout. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  32. ^ a b Bedell, Malcolm (April 15, 2019). "This Is Why Costco's Hot Dog Combos Really Cost $1.50". Mashed. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
  33. ^ De Avila, Joseph (July 14, 2022). "The $1.50 Costco Hot Dog Combo That Defies Inflation". The Wall Street Journal. ISSN 0099-9660. Archived from the original on July 8, 2023. Retrieved August 29, 2023.
  34. ^ Cain, Áine (April 10, 2018). "Why Costco food courts have charged $1.50 for hot dogs since 1985, according to employees". Business Insider. Archived from the original on August 29, 2023. Retrieved August 29, 2023.
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