Costco Won’t Raise Hot Dog and Soda Combo’s $1.50 Price Anytime Soon, If Ever
During a presentation on fourth quarter financial results, Costco CFO Richard Galanti was asked if the company was going to harvest extra margin on some categories — like the hot dog and soda combo — to offset the margin squeeze in other areas.
“We really don’t look at it that way,” said Galanti, according to MarketWatch. Galanti then explained that the travel and gas side of the business is doing well enough to be “more aggressive” in some areas, allowing Costco to “hold the price on the hot dog and the soda a little longer — forever.”
The combo has been priced at $1.50 since 1985, but according to the Bureau of Labor Statistics’ inflation calculator, it’s worth more than $4 today, The Seattle Times reported. Instead of increasing prices, Costco switched from Hebrew National franks to Kirkland Signature brand hot dogs at a plant in Los Angeles. Another hot dog-manufacturing plant has been opened in Chicago to help support the growing demand, 425 Business noted.
“By having the discipline to say, ‘You are not going to be able to raise your price. You have to figure it out,’ we took it over and started manufacturing our hot dogs. We keep it at $1.50 and make enough money to get a fair return,” Costco CEO Craig Jelinek said at the Issaquah Chamber of Commerce’s April 12 luncheon.
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