Costco's CFO Just Made A Major Announcement About Its Hot Dog Combo Price
You're in the U.S., and the year is 2022. How many meals can you buy for $1.50? Unless you're in on a secret, the answer is pretty much zero. According to Investopedia, much of this has to do with inflation, which is usually driven by higher costs of production or an increase in demand. Unfortunately, the U.S. is experiencing one of the highest inflation rates in history. During the 2008 financial crisis, inflation rose up to 5.6%; comparatively, inflation rose to a high of 9.1% in June 2022 (via U.S. Inflation Calculator).
What does inflation mean for businesses? It results in the majority of businesses raising prices, and more often — some are forced, and others are taking advantage of the situation, per the University of Reading's Henley Business School. As CNN noted, there are very few deviations, but Costco's hot dog combos are one of them. The popular wholesale retailer makes most of its profit from membership fees, according to The Motley Fool; this allows it to focus on affordable products. In an interview with CNBC, Costco CEO Craig Jelinek said Costco's not likely to raise membership fees, either. So if that's the case, will the price of Costco's hot dog remain the same, or will its price point become a casualty of inflation?
Costco will keep selling its $1.50 hot dog and soda combo 'a little longer, forever'
Costco has vowed to keep the price of its quarter-pound all-beef hot dog and 20-ounce soda combo at $1.50 for "a little longer, forever," CFO Richard Galanti said in a statement made during a phone meeting regarding Costco's Q4 earnings report in September (via Fortune). In an interview with The Wall Street Journal, Galanti said that the cost of Costco's famous hot dog meal is "sacrosanct" and called it "a signature item" unique to the big box chain. It would seem that this is true, since Costco keeps its hot dog combo price consistent and has done so since 1985.
Investopedia explains that Costco keeps its prices low largely through its bulk buy option, which underprices the competition and keeps members coming back. No matter how or why Costco hotdogs are so cheap, fans everywhere will be thrilled to know that one of their favorite affordable meals will stay the same price "a little longer, forever," as Galanti put it. Time to shell out a buck fifty and overload your quarter-pound dog with complimentary condiments.