Costco’s signature $1.50 hot dogs remain an ever-popular staple for shoppers at any of the retailer’s 602 warehouses nationwide, but exactly how has the big-box store kept the price of the all-beef cuisine so low cost since its introduction in 1985?
The explanation, at first, was sentimental.
Costco’s late chairman Jeffrey Brotman, who co-founded the warehouse empire with its since-retired CEO Jim Sinegal, told the now-defunct King County Journal newspaper in Bellevue, Washington, in the early 2000s that his first business enterprise was operating a hot dog cart at the Seattle Center along with his brother in the late Seventies, the Daytona Beach News-Journal reported.
After Brotman teamed up with Sinegal in 1983 to form Costco, the pair pledged never to raise the price of the hot dog and soda combo.
With inflation pushing costs higher over the ensuing a long time, the financial Motely Idiot wrote in an article published last 12 months that Costco ought to be charging at the least $4.25 for the combo meal.
But in a 2018 interview with Seattle-based publication 425 Business, then-CEO Craig Jelinek recounted the famous response from Sinegal, who had since retired, to being told that the hot dog price wasn’t sustainable.
![This is a close-up of the quarter-pound all-beef hot dog and 20-ounce soft drink combo at the new Costco at One Daytona purchased on the morning of the Daytona Beach store's opening day, Thursday, Feb. 22, 2024. The price for the combo was $1.50, unchanged from when the retail giant began offering it in 1985.](https://nypost.com/wp-content/uploads/sites/2/2024/02/close-up-quarter-pound-all-76976427.jpg?w=1024)
“I got here to (Sinegal) once and I said, ‘Jim, we are able to’t sell this hot dog for a buck fifty. We’re losing our rear ends,’” Jelinek said. “And he said, ‘Should you raise the effing hot dog, I’ll kill you. Figure it out.’”
Jelinek recounted how he solved the issue by constructing Costco its own hot dog manufacturing plant in Los Angeles, and later one other plant in Chicago, to avoid using dearer third-party suppliers.
With the plants up-and-running, Jelinek told the outlet that the hallmark item was making “enough money to get a good return.”
Jelinek was questioned again whether the hot dog price tag would ever change in a July 2022 interview on CNBC’s “Squak on the Street.”
Jelinek simply replied, “No.”
Other leaders at the warehouse giant have issued similar answers about their intentions with the hot dog and soda combo prices during shareholder meetings.
In 2022, Costco’s then-CFO Richard Galanti told investors that the $1.50 price was not in peril of disappearing any time soon when asked about the believed margin squeeze over the low cost cost, MarketWatch reported at the time.
“We actually don’t have a look at it that way,” Galanti said. “Some businesses which might be doing well with margin … those things help us be more aggressive in other areas, or, as you mentioned, hold the price on the hot dog and the soda just a little longer — ceaselessly.”
With Jelinek retiring last 12 months and Galanti stepping down last month, some have wondered whether the price of the combo meal was in jeopardy. But Costco has shown no sign of breaking its co-founder’s pledge any time soon.
Last month, an Ohio resident went viral after eating nothing but the $1.50 hot dog and soda combo from Costco for an entire week. He explained to Fox Business that the rising costs of food in the past few years pushed him to undertake the challenge, spending a complete of about $45 on the meals.