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Costco STILL Sell its Hot Dog and Soda Combo for $1.50...over threats of death...


Every loyal Costco consumer knows that their favorite supermarket offers more than just fantastic prices on household items. It offers delectable meals at a stupidly low cost.


The hot dog and soda combo, which costs $1.50 and includes a big dog and a 20-ounce Coke, is a popular choice in the Costco food court. The store's hot dog supplier at the time, Hebrew National, set up a cart outside a San Diego warehouse in 1984. Costco's entire food court business grew as a result of its initial success, but the combination pricing hasn't altered in over 30 years.



When Costco president W. Craig Jelinek complained to Jim Sinegal, Costco co-founder and former CEO, that their mammoth warehouse operation was losing money on their famously cheap $1.50 hot dog and soda bundle, Sinegal listened, agreed, and then did his best to make his point absolutely clear.


"If you raise [the price of] the effing hot dog, I will kill you," Sinegal said. "Figure it out."


Taking Sinegal's advice to heart, Jelinek, who succeeded Sinegal in 2012, has never hiked the price of Costco's hot dog. Since the shopping club initially introduced the dogs to clients in 1984, it has sold for the same $1.50. The quarter-pound all-beef tube and 20-ounce Coke combination appears to be inflation-proof and impervious to food wholesaler whims. How does Costco manage to do it?


The rationale for this is due to the company's corporate philosophy. Costco could easily make millions more in annual profits by raising pricing, but keeping hot dogs and other food court fare at affordable costs has proven to be a strong incentive for customers. Knowing that they can buy an inexpensive, ready-to-eat meal when cooking is the last thing on their mind is a significant bonus for folks who have to go grocery shopping on a weekly basis. Costco's other well-known low-cost offering is their $4.99 rotisserie chickens.


Costco now sells more than 100 million hot dogs per year, more than every MLB stadium combined. And they continue to surprise us with their ability to add even a single cent to the bargain. When the state of California passed a soft drink tax that would have increased consumer costs, Costco outlets across the state changed the combo to include Diet Pepsi. (Diet drinks are not subject to the law.) For the foreseeable future, the company's "effing hot dog" will remain a bargain.





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