I am a recent convert into the Costco cult. I never quite knew the magic of buying in bulk, especially not at a level of quality that I typically see at Costco (end paid promotion).
And every time I enter the warehouse, there it is: that wonderful, massive sign in the food court, marketing Costco’s limited but legendary menu. That includes perhaps the most legendary menu item of all in the $1.50 hot dog (ALL BEEF) and soda combo (with refill!).
Over the past 30 or so years, Costco has almost become famous for the hot dog combo alone, as its price continues to produce ongoing PR wins for the company. Most recently, CEO Craig Jelinek confirmed it would be a cold day in hell before Costco raised the price of the hot dog combo in the face of rampant inflation. This bold proclamation came even as Sam’s Club – Costco’s bulk warehouse rival – actually lowered the price of its hot dog combo to $1.38, perhaps a desperate attempt to siphon some goodwill of its own.
Costco confirmed it wouldn’t be lowering the price of the hot dog and soda combo, either. To them, they have achieved a Zen-like balance at the $1.50 price point that mustn’t be disturbed.
The Costco Co-Founder’s Threat to Kill the CEO If He Ever Raised the Price of the Hot Dog
If you’re a Costco member, you surely understand why people are zealots. This goes all the way to the top and includes Jim Sinegal, a co-founder of Costco. Jelinek has told a story in the past that, back when he was COO, he told Sinegal the company had to raise the price of the hot dog because it was losing the company money.
Here is what Sinegal told Jelinek in response:
‘If you raise the effing hot dog, I will kill you. Figure it out.’ That’s all I really needed.”
Thanks to Sinegal’s death threat and promise to send Jelinek straight to hell, we are able to still enjoy a hot dog and soda at any Costco location for a tremendously affordable price. Are we insinuating that threats of physical violence can get stuff done? No… but… it has its moments.
Why Is the Costco Hot Dog and Soda Combo Still So Cheap?
Even as Costco’s hot dog and soda combo has remained so affordable for 30+ years, that doesn’t necessarily mean the company is content with actually losing money on it. That being said, Costco took it upon itself to build a hot dog-manufacturing facility of its own in Los Angeles, with a second location eventually opening up in Chicago.
But the quest didn’t stop there. Costco also dropped suppliers like Hebrew National and Nathan’s because they wouldn’t drop their prices and in turn got better pricing on condiments like ketchup and mustard (while removing onions and sauerkraut as free toppings). Polish sausages were dropped, and that soda went from a can to a refillable cup.
So the company has certainly put its money where its mouth is when it comes to keeping the hot dog combo price so low. So the next time you enjoy a Kirkland Signature dog in a Costco food court, and a single tear falls down your cheek but you’re not exactly sure why, consider the emotions you might be feeling in regards to Costco spitting in the face of inflation, keeping the hot dog and soda combo so cheap, and proving that they’ll always be looking out for us.
