Being Frank About Costco’s $1.50 Hot Dog Combo

Costco bending over backward to continue to price hot dogs at $1.50 will no doubt go down as one of the most effective uses of loss leader in corporate history.

Customers wait in line to order below signage for the Costco Kirkland Signature $1.50 hot dog and soda combo, which has maintained the same price since 1985 despite consumer price increases and inflation, at the food court outside a Costco Wholesale Corp. store in Hawthorne, Calif., on June 14, 2022. Patrick T. Fallon/AFP via Getty Images

Commentary

Costco’s new chief financial officer, Gary Millerchip, sent disciples of the ultra-low-priced warehouse chain into ecstasy when he told Wall Street analysts in May that the price of its legendary $1.50 quarter-pound, all-beef hot dog and soda with free refills would, despite raging inflation, remain at the price it has held for about four decades.