A hot dog with condiments and a large soda costs just $1.50 at Costco.
Costco is beloved by its customers for many reasons, from quality items at wholesale prices to the way the company cares for its employees. But one Costco staple in particular has earned the loyalty of customers like no other—the $1.50 hot dog meal.
At a time when you can easily drop $10 to 15 on a single fast food meal, spending $1.50 on a delicious, jumbo, all-beef hot dog plus toppings plus a large soda almost feels like highway robbery. And we have one man—and his direct death threat—to thank for it.
The Costco hot dog debuted in 1985 at $1.50 and the price has remained unchanged in the nearly 40 years since. Former Costco CEO Craig Jelinek once tried to broach the subject of increasing the price in response to inflation with one of the store's co-founders, Jim Sinegal. It didn't go so well.
The infamous Costco hot dog death threat
As Jelinek recalled in a 2018 interview, “I came to [Jim 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 effing hot dog, I will kill you. Figure it out.’"
Okay then.
Costco food court hot dogs are 100% beef.Photo credit: bob walker from London, UK
Sinegal, now 88, told the Seattle Times in 2009 that if the price on the hot dog combo ever goes up, it means he's dead. He told the paper:
"It’s amazing how creative we have been to figure out ways to keep the price down. It was a Sinai hot dog, and now it’s a Kirkland Signature hot dog. It’s actually 4.4 ounces, so it’s slightly bigger than a quarter pound now. It’s a drink and a free refill on the drink for a buck fifty. We used to sell the soda in a can, and we put in soda machines, which took the price down. We improved the cost of the condiments, we’ve purchased better on buns and things like that.
It’s the same quality hot dog, all beef, the best ingredients that you can imagine. I know it sounds crazy making a big deal about a hot dog, but we spend a lot of time on it…When you get customers who are that delighted with something, it’s worth your time and energy to make it work…We’re known for that hot dog. That’s something you don’t mess with.”
Costco sells its hot dog combo for a song at locations around the world.Photo by Grant Beirute on Unsplash
When, if ever, will Costco raise its hot dog meal price?
Surely, there has to be a breaking point, though, right? Loss leaders are common in the retail business, but no one would bat an eye if the hot dog went up, say, 50 cents. Even at double its current price point, it would still be a ridiculously cheap meal. You can't even get the soda for $1.50 anywhere else. Can Costco really keep selling this combo without even breaking even?
It's a legitimate question, especially with Costco's four-decade Chief Financial Officer Richard Galanti stepping down in the spring of 2024. As the longest-serving CFO of a major U.S. public company, Galanti has overseen pretty much the entirety of Costco's meteoric rise as a money-saving warehouse giant. It's been ultimately up to him to "figure it out," and he has. But with a new CFO coming in, people have wondered if the infamous hot dog deal would continue to stick.
"To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” new Costco CFO Gary Millerchip told analysts on an earnings call in May 2024, according to CNN.
Safe. Phew.
As Sinegal has said, the hot dog is an integral part of Costco's brand at this point in addition to being a fan favorite.
"I was standing in line behind some people in San Francisco one time, a young man and a woman just getting a hot dog, and he says, 'No, you need your cup to get the drink,' and she said, 'We didn’t pay for the cup,' and he said, 'No, you get the drink, too. Don’t you get it? That’s the great thing about this place!'" he told the Seattle Times. "We have people who have parties at our hot-dog stands. Guys in Florida get together and have T-shirts that have the Costco hot dog on them. We have people who after their wedding party came over and got a hot dog at one of our warehouses."
Tips for saving even more money at Costco
The hot dog is not the only almost-too-good-to-be-true deals Costco offers its members. Their $4.99 rotisserie chickens are twice the size and half the price of many grocery store chickens, and whatever they flavor them with is divine. Need a cake that feeds a huge crowd for an event? The Costco bakery's legendary cake system may seem antiquated and terrifying if you've never ordered one, but trust the system and enjoy the delicious layered half-sheet cake that feeds 48 people for $25. Not everything is super cheap at Costco, but frozen fruits and veggies, butter, eggs (regular and organic), cheese, toilet paper, laundry detergent,—all of those are generally a far better deal at Costco than any grocery store.
Costco meat can be a great deal or just an okay one, depending on what you're buying.Photo by Tyler Menezes on Unsplash
Want to save even more money at Costco? Look for prices ending in $.97. Those items have been marked down at that specific store, often to clear them out. There are some huge bargains to be had in those massive aisles, especially when you know what to watch for.
People often ask if it's worth the annual membership fee. Of course, it depends on your needs and how you shop, but members generally agree that the membership more than pays for itself. Even single people and couples share that they save more than they spend on the membership, as long as they actually use it.
Think of it this way. The lowest membership fee is $65 a year. The hot dog combo has a value of $4.50 if the price had kept up with inflation. If you took your family of four to Costco for a cheap hot dog dinner once a month—for a whopping $6 a time—you'd essentially be "saving" $144 just in the value of the that combo meal. And that's before you even step foot on the warehouse floor.
Here's hoping that the hot dog combo deal stays "safe" for the foreseeable future.
