If You Raise the Price of the Hot Dog

If you raise the price of the hot dog: Some good news for inflation-weary Americans: There will be no price hike on Costco’s hot dogs.

In an interview Monday on CNBC’s “Squawk on the Street,” CEO Craig Jelinek had one-word answer. When ask whether he would raise the signature food court item’s price: “No.”Costco CEO’s one-word answer to whether he would raise price of hot dogs: ‘No.’

Costco has continued to make strong sales, even as other retailers have spoken about consumers. Becoming more budget-conscious and spending more on service instead of good. It’s also avoided another recent problem for many retailers: excess inventory that’s rack up in warehouses and store, which must now be packed away or marked down.

The article recounts time when Jelinek approached Costco co-founder and former CEO Jim Sinegal. He told him company was losing money over iconic food item.

Costco has raised prices of some food court staples. Earlier this month, its chicken bake jumped from $2.99 to $3.99 and its 20-ounce soda rose by 10 cents to 69 cents. That prompt speculation that its hot dog’s super low price could also be due for hike. The hot dog and soda combo has sold for $1.50 for decade and was subject of Mental Floss article from 2018 that recently began circulating again. Yet amid nearly four-decade-high inflation.

“I came to Sinegal once and said, ‘Jim, we can’t sell this hot dog for a buck fifty,” Jelinek said, according to Mental Floss article, which cites 425Business. “We are losing our rear ends.’ And he said, ‘If you raise the price of an effing hot dog, I will kill you. Figure it out.’ That’s all I really needed.”

Costco’s founder once told the company’s current CEO, ‘if you raise the price of the effing hot dog, I will kill you.’

Costco has charged $1.50 for its hot dog and soda combo since 1985, and quote from Costco founder Jim Sinegal explains why that is. When Costco’s now-CEO Craig Jelinek approached Sinegal about raising price of the combo, Sinegal told him, “I’d kill you” if Jelinek raised price.

In January shareholders meeting, Jelinek said Costco has “no plans to take hot dog above buck fifty.” Costco co-founder once said ‘I will kill you’ to CEO who wanted to hike price of the $1.50 hot dog combo Jim Sinegal, Costco’s +0.57% co-founder, has always been fiercely customer-first, an approach the wholesale giant has fostered for decade. Of course, shareholders aren’t complaining, considering how stock has fared since it IPO’d decade ago at split-adjusted $1.67 share.

At last check, it was trading around $334.

• A small testament to that customer-focus mindset is the beloved hot dog and soda combination, which has been offered for a mere $1.50 ever since it debuted in 1985.
• That, however, might have changed if Craig Jelinek, who replaced Sinegal as CEO in 2012, had his way. According to article from 2018, Jelinek threw out the idea of raising the price of iconic combo and drew rather strongly worded response from Sinegal. “If you raise [price of the] effing hot dog, I will kill you. Figure it out,” is what Jelinek recalled Sinegal saying.
• Two years later, and that quote really struck chord on social media Sunday. This tweet, from account with less than 1,000 followers, blew up to tune of more than 400,000 likes overnight:
• We’ll get idea of how Costco, which got big coronavirus boost earlier this year, performed in t quarter that just ended in August when company posts its financial results later this week. The numbers are expected to show increases in both profit and revenue.

Costco has charged $1.50 for its iconic hot dog and soda combo since 1985.

When Costco’s current CEO Craig Jelinek, once approach Sinegal, then CEO. About raising price of hot dog, Sinegal told him, “If you raise price of effing hot dog, I kill you. Figure it out.”An old quote from Costco founder Jim Sinegal about why that is has resurfaced on Twitter after user posts screenshots from 2018 Mental Floss article.

Therefore, in 2009, Jelinek did figure it out. Costco stopped using its longtime hot dog supplier, Hebrew National, and built Kirkland Signature hot dog factory. In Los Angeles and later built another one in Chicago. Thus, the new factory reduce production costs for hot dog, allowing Costco to continue selling menu item for $1.50.

Jelinek told local Seattle Eastside publication 425Business in 2018 that he expected people would still buy hot dog if price raise to $1.75.

Costco’s $1.50 hot dog and soda combo

Not many companies pledge to never raise the price of an item, which is part of why famous Costco $1.50 hot dog and soda combo get so many attention, especially when inflation is running rampant.

The affordable meal garnered attention over years in part. The 2018 Mental Floss article quoted Costco co-founder Jim Sinegal telling CEO Craig Jelinek. “If you raise price of effing hot dog, I will kill you.”

Thankfully for shoppers and Jelinek’s loved ones, More recently, in 2022. When asked on CNBC’s “Squawk on the Street” Costco still hasn’t changed the price. If Costco would increase the cost of the combo, Jelinek simply said, “no.”

Similarly, Costco has kept price of its grill chickens at $4.99 since 2009. Like the hot dog combo, the chicken known as a “loss leader,” or a product companies are willing to sell at a loss because its low price lures in customer who will likely buy other items as well.

Conclusion

Another aspect of Costco’s business has also been searched for: When its membership fee might increase. Costco membership costs $60 or $120 year for executive membership, higher-tier option that include additional discount and perk.

The numbers are expected to show increases in both profit and revenue. The new factory reduce production costs for hot dog, allowing Costco to continue selling menu item for $1.50.

Jelinek told local Seattle Eastside publication 425 Business in 2018 that expected people. Would still buy hot dog if price raise to $1.75.