In an interview with Fox News Business, influencer Joey Kinsley shares his experience shedding pounds while eating nothing but Costco hot dogs for an entire week.
Costco's signature $1.50 hot dogs remain a popular staple for shoppers at each of the retailer's 602 warehouses across the country, but how exactly has the big box store kept the price of the all-beef fare so low since its introduction in 1985 ?
The reason was initially sentimental.
Costco's late chairman Jeffrey Brotman, who founded the warehouse empire with its now-retired CEO Jim Sinegal, told the now-defunct King County Journal newspaper in Bellevue, Washington, in the early 2000s that his first business venture was making a hot dog As the Daytona Beach News-Journal reported, he drove a shopping cart with his brother at the Seattle Center in the late 1970s.
After Brotman teamed up with Sinegal to create Costco in 1983, the two vowed never to raise the price of the hot dog and soda combo.
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Over the years, Costco officials have committed to keeping the price of the hot dog and soda combo as low as possible. (iStock / iStock)
As inflation drove up costs in the following decades, financial magazine Motely Fool wrote in an article published last year that Costco should charge at least $4.25 for the combo meal.
But in a 2018 interview with Seattle-based publication 425 Business, then-CEO Craig Jelinek recounted the now-retired Sinegal's famous reaction when he was told the hot dog price was unsustainable .
“I came to (Sinegal) once and said, ‘Jim, we can’t sell this hot dog for fifty dollars. We’re losing our backsides,'” Jelinek said. “And he said, ‘If you raise the damn hot dog, I’ll kill you. Find out.'”
The hot dog and soda combo at Costo's food court has remained at a consistent price of $1.50 since its introduction in 1985. (Patrick T. Fallon/AFP via Getty Images, File/Getty Images)
Jelinek told how he solved the problem by building Costco its own hot dog production facility in Los Angeles and later another facility in Chicago to avoid using more expensive third-party suppliers.
While the factories were operating, Jelinek told the outlet that the branded item was “making enough money to provide a fair return.”
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 737.93 | +3.53 | +0.48% |
In an interview on CNBC's “Squak on the Street” in July 2022, Jelinek was asked again if the price of hot dogs would ever change.
Jelinek simply replied, “No.”
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Other executives at the warehouse giant have given similar answers at shareholder meetings about their intentions with the hot dog and soda combo pricing.
In 2022, Costco's then-CFO Richard Galanti told investors that the $1.50 price wasn't going away any time soon when asked about the suspected margin squeeze versus cheap costs, MarketWatch reported at the time.
“We really don’t see it that way,” Galanti said. “Some companies that do well on margin…those things help us be more aggressive in other areas or, as you mentioned, hold the price of the hot dog and soda a little longer – forever.”
The hot dogs have become a staple for Costco members. (Tim Boyle/Getty Image, File/Getty Images)
With Jelinek retiring last year and Galanti resigning last month, some wondered whether the price of the combo meal was at risk. But Costco has shown no signs of breaking its co-founder's promise any time soon.
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Last month, an Ohio resident went viral after eating nothing but Costco's $1.50 hot dog and soda combo for an entire week. He told Fox Business that rising food prices in recent years prompted him to take on the challenge, spending a total of about $45 on meals.