Costco CFO Says Hot Dog & Drink Combo May Stay $1.50 USD Forever
The deal has been the same price since 1985 and the retail company loses money on each hot dog sold.
According to reports, Costco may keep its famed Hot Dog & Drink combo at $1.50 USD forever. During a recent fourth-quarter earnings call, Costco Chief Financial Officer Richard Galanti was asked if the membership-only big-box retail company would increase the price of its iconic menu item.
Jokingly responding with “lightning just struck me,” Galanti noted that other parts of Costco’s business would keep the Hot Dog & Drink combo the same it has been since 1985. “Some businesses that are 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 a little longer — forever,” said Galanti.
Amidst rising inflation, other menu offerings, like the popular Chicken Bake and 20-ounce soda, at Costco’s food court have seen price increases in recent months.
Selling 100 million hot dogs per year, Costco’s Hot Dog & Drink combo has been $1.50 USD for more than 35 years, despite losing money on every hot dog sold. In a 2009 edition of Costco Connection Magazine, Assistant Vice President of Publishing David Fuller highlighted that the long-standing steady price is a result of its cost-plus business model rather than a “what the market will bear” model. The strategy means “a business can operate on a fair markup and still pay all of its bills.”
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