Costco’s $1.50 hot dog deal has defied inflation. Fans say it isn’t what it used to be

Costco CEO Craig Jelinek promised CNBC on Monday that the price of the hot dog combo won’t be rising anytime soon.

Even for wholesalers, food prices are rising at record rates, yet Costco will continue to provide its well-known dog and drink package. Despite the fact that the inflation calculator for the Bureau of Labor Statistics indicates the combo should be worth more than $4 now, it only cost $1.50 when it first appeared in food courts in 1985.

In a now-famous exchange, Jim Sinegal, the company’s co-founder, allegedly responded to Jelinek’s suggestion to increase the price by stating, “If you raise [the price of] the effing hot dog, I will murder you.” Costco went from using Hebrew National franks to producing its own Kirkland Signature brand hot dogs in a plant in Los Angeles, according to Mental Floss, rather than raising prices.

Although the package’s pricing has held up well over time, some ardent supporters wonder if they are still getting a decent deal. (There are many devoted people. According to the Puget Sound Business Journal, the wholesaler sold 151 million combos during the 2019 fiscal year.)

For 35 years, Pat and Monty McCormick have been Costco members. They enjoy visiting the food court with their kids and grandchildren, and they frequently purchase the hot dog and Coke combo. However, they don’t find themselves purchasing franks as frequently now that the retailers have removed the sauerkraut and onions from the condiments bar.

Pat McCormick stated, “I sometimes think retailers don’t appreciate how much the adjustments they make effect customers. “The retailer may believe it to be a minor detail, but to the customer, it could mean a great deal.”

Numerous Seattle Times readers expressed their opinions on the significance—or lack thereof—of the pairing earlier this week. One reader stated, “It’s a mainstay of my trips to Costco.”

If the price went up, some consumers claimed they would stop purchasing the hot dogs. Others added that even at $2 or $3, it was a “Hell of a deal.” It’s so wonderful, according to one reader, that he advises his buddies to plan their first dates at a Costco food court.

Many comments bemoaned the disappearance of the Polish sausage, a Costco item that was eliminated in 2018 to make room for healthier options. Some claimed they would gladly pay extra to have it returned. Monty McCormick’s go-to order was the Polish dog with sauerkraut and onions.

The onions and sauerkraut were removed from the store’s condiment selection to “streamline” it beginning during the COVID-19 outbreak, according to John Bartlett, general manager of the Costco in Seattle’s Sodo area. Bartlett was unsure whether the adjustment was company-wide and whether the popular toppings’ removal was due to cost.

According to Jeff Shulman, a marketing professor at the University of Washington’s Foster School of Business, the longer consumers pay fixed prices for iconic products—like $1.50 for the hot dog combo or 5 cents for a bottle of Coca-Cola—the more difficult it is to alter those prices without receiving negative feedback. Customers at Costco are aware of the exact price of a hot dog combo, so any price rise would be obvious and, in theory, give the impression that Costco is becoming a more costly place to buy.

However, Shulman said that a moment of widespread inflation offers the ideal chance for price increases because the company may attribute the increase on higher supply costs. It will be more challenging to modify prices in the future as a result of Costco’s decision to maintain its current level.

Shulman stated, “I can’t conceive that it’ll still be the best economic decision if things stay the same. Enjoy it while you can.

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