The Real Reason Costco’s Hot Dogs Cost $1.50
The best part is, this low price isn't going anywhere!
Every devout Costco shopper knows their favorite superstore has more than great deals on home goods. It sells delicious food at a ridiculously cheap price.
One of the go-to choices in the Costco food court is the hot dog and soda combo, which gets you a jumbo dog and 20 oz. soda for $1.50. In 1984, Hebrew National, the store’s hot dog supplier at the time, set up a cart outside a San Diego warehouse. Its initial success spurred Costco’s entire food court business, but the combo price hasn’t changed in over 30 years.
The reason lies in the company’s business philosophy. Costco could easily rake in millions more in annual profits by raising prices, but maintaining low prices for hot dogs and other food court eats works as a proven incentive for shoppers. For people that need to make weekly shopping trips, knowing they can buy a cheap, ready-to-eat meal when cooking is the last thing they want to do is a huge perk. That includes Costco’s other notoriously cheap item, their $4.99 rotisserie chickens.
The convenient meal options also help justify the cost of a yearly membership, especially when $1.50 buys shoppers more food than ever. The original hot dog/soda combo included a 12 oz. can of soda and a quarter-pound hot dog. Today, it comes with a 20 oz. soda, plus free refills, and a dog that’s 10 percent bigger. That’s because Costco replaced the Hebrew National hot dogs with their own Kirkland brand product in 2009.
Since the cheap hot dogs are a win for the company and its shoppers, you don’t need to worry about those prices going up any time soon. And that’s not the only novelty reason to stop in this famous superstore. Check out these other reasons to love Costco.