The Founder Who Refused to Raise the Hot Dog Price

Most things cost more than they did in 1985. A first-class stamp has gone from 22 cents to 73 cents. A gallon of gas has risen from under a dollar to over three. And a Costco hot dog and soda combo? Still $1.50.

The Combo That Refused to Change

Costco introduced its food court hot dog and 20 oz soda combo in 1985 at $1.50. Every CFO, every economist, every decade of inflation has come and gone - and the price has never moved. Today Costco sells over 150 million combos per year, more than every Major League Baseball stadium combined.

The Founder's Response

Around 2008, CEO Craig Jelinek approached co-founder Jim Sinegal with a straightforward concern: the combo was losing money. He suggested raising the price to $1.75. Sinegal's response became one of the most quoted lines in retail history: "If you raise the effing hot dog, I will kill you. Figure it out." Jelinek recounted the exchange publicly at a 2018 Chamber of Commerce speech.

He Figured It Out

Instead of raising the price, Costco cut out the middleman. Their original suppliers - Hebrew National and Sinai 48 - couldn't meet Costco's surging volume. As former CFO Richard Galanti explained: "Because of our volume, we were driving up their prices." So Costco built its own hot dog manufacturing plant in Tracy, California. That facility now produces over 200 million hot dogs per year. A second plant opened in Morris, Illinois in 2018.

The Strategy Behind the Stubbornness

The $1.50 combo is deliberately sold at a loss. It drives members through the door, fuels membership renewals, and anchors the brand around honest value. Galanti told investors Costco plans to hold the hot dog price "forever." New CEO Ron Vachris, who took over in 2024, has said the same. Sinegal stepped back from operations in 2012. His successor - the same man he once threatened - ran the company for over a decade without raising the price once.