How the big-box giant has kept a price constant since the 1980s
$1.50: That’s the cost of a hot dog and a soda at Costco’s food courts — a price that hasn’t changed since the 1980s.
Numbers that stand perfectly still don’t usually attract attention, but Costco’s $1.50 deal has attracted a flurry of interest lately precisely because the big-box giant has stuck with it. According to Mental Floss, the combo (a quarter-pound all-beef dog paired with a 20-ounce soda) dates to 1984. Over time, inflation made it unprofitable. But Costco co-founder Jim Sinegal felt the deal was still worth offering because it served as an attraction and a goodwill-builder. He had a blunt message for an executive who wanted to charge more: “If you raise [the price of] the effing hot dog, I will kill you. Figure it out.” (This line, recently quoted in a very viral tweet, is evidently what caused the fresh round of awe about this time-capsule meal bargain.)
Clearly, Costco could charge more; according to this inflation calculator, $1.50 in 1984 is equal to $3.75 today. And in fact, the company has taken steps to reduce the associated costs over the years — dumping Coke products when Pepsi offered a sweeter deal and producing its own dogs instead of buying them from early supplier Hebrew National. In 2019, Costco reportedly sold 150 million of the combos. The executive who once floated the idea of raising the price is now the CEO and apparently still sees the wisdom in that order he got years ago. “We have no plans to take that hot dog above a buck 50,” he declared at the company’s shareholder meeting this past January. “End of story.” The audience applauded.
The lesson: If you find a good promotional gimmick, relish it.
The Link LonkOctober 13, 2020 at 12:34PM
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Costco's Hot Dog Meal Price Hasn't Changed Since 1984 | Marker - Marker
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