Costco is a place full of many wonders: 27-pound buckets of macaroni and cheese, $400,000 diamond rings and, of course, the $1.50 hot dog-soda combo. Oh, the joy of marching out of the warehouse with a full cart and a Costco hot dog in hand is incomparable. The price of such a prized product doesn’t make sense and it doesn’t need to.
But this week, a viral tweet provided a peek into exactly why the price has remained unchanged all these years.The tweet features a screenshot from an article on Mental Floss, which references a 2018 story from 425 Business. The publication covered a luncheon hosted by the Issaquah Chamber of Commerce in Washington where Costco CEO Craig Jelinek was the keynote speaker. The article featured quoted excerpts from his presentation, including this gem on why a soda and hot dog from the club retailer remains $1.50:
“I came to [Costco co-founder Jim Sinegal] once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends,'” Jelinek said according to the excerpt. “And he said, ‘If you raise the effing hot dog [price], I will kill you. Figure it out.'”
We love hot dogs as much as the next person, but this is a whole new level of commitment.
To help ensure consistent pricing, Costco introduced its Kirkland Signature quarter-pound hot dogs to its food courts by 2009, replacing the products from two former suppliers, one of which was Hebrew National.
And while death threats may appear to be an unconventional method of business operations, it appears to have worked as the iconic hot dog deal is — and shall remain — less than $2. Retail Dive