Costco finance exec gets frank: ‘The $1.50 hot dog price is safe’
Despite inflation and the cost-of-living crisis impacting the food industry across the United States, top Costco executives say that the $1.50 hot dog deal is safe and sound from any price hikes.
The members-only wholesaler revealed that they beat their third-quarter expectations on Thursday, with net sales increasing by 9.1 per cent across that period, according to a news release.
“As inflation has levelled off, our members are returning to purchasing more discretionary items,” Costco’s new chief financial officer Gary Millerchip said, MarketWatch reported. Growth in that category was led by toys, tyres, lawn and garden, and health and beauty aids.
Mr Millerchip also hastened to quash any rumours that the famous, cheaply-priced hot dog at the Costo food court could rise in price.
“Oh, and to clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” he added.
Mr Millerchip’s predecessor Richard Galanti told Bloomberg in March that the all-important hot dog is “probably safe for a while.”
The price of the quarter-pound hot dog with a 20oz soda has remained the same price since 1985 at the warehouse retailer, despite world events and the ebbs and flows of inflation since then.
It has remained a favourite among shoppers for decades and has somewhat of a cult following.
At one point, Costco’s former CEO Jim Sinegal jokingly warned his successor, Craig Jelinek, to keep the hot dog at the $1.50 price, no matter what.
"I came to [Mr Sinegal] once, and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends.’ And he said, ‘If you raise the ef**** hot dog, I will kill you. Figure it out,” Mr Jelinek recalled in a 2018 presentation, reported on by 425 Business.
Mr Jelinek, former CEO, said that to keep the price at a low level, they built their own dog-manufacturing plant and made their own Kirkland Signature hot dogs.
In fact, all Costco’s CEOs have been defending the unbelievably low price of the meaty meal for years.
Back in 2009, Mr Sinegal told The Seattle Times that Costco is “known for that hot dog” and they do not dare “mess with” it.
“People look at that hot dog and say a buck fifty, this is unbelievable,” he said. “When you get customers who are that delighted with something, it’s worth your time and energy to make it work.”
Last year, Costco sold more than 130 million hot dog-soda combos globally, according to CNN, worth $195m.
Costco has a reputation for selling just about anything, from rotisserie chickens to brand-new electronics, massage chairs and garden furniture, at affordable prices with a few free samples along the way.
The wholesaler currently operates 605 warehouses in the US and Puerto Rico, with hundreds more around the world.
