In a world where everything costs more every year, one price remains frozen in time: Costco's $1.50 hot dog and soda combo. Since 1985, this deal has survived recessions, pandemics, and enough inflation to make your grandparents weep.

That $1.50 would be worth about $4.40 today if it had kept pace with inflation. Instead, Costco loses money on every single combo sold. And they're totally fine with it.

The Threat That Saved the Hot Dog

When CEO Craig Jelinek suggested raising the price, co-founder Jim Sinegal had a simple response: "If you raise the effing hot dog, I will kill you."

That wasn't hyperbole. Sinegal viewed the combo as sacred—a promise to members that transcended profit margins. The price stayed put.

Building a Hot Dog Empire

By 2009, maintaining the $1.50 price became impossible with outside suppliers. So Costco did what any rational company obsessed with cheap wieners would do: they built their own hot dog factories.

Today, Costco manufactures its own Kirkland Signature all-beef hot dogs, producing over 100 million annually. They control every part of the supply chain, from the beef to the buns to the condiments. Vertical integration never tasted so good.

The Loss Leader That Keeps Customers Coming Back

Costco doesn't make money on the combo. But they don't care. The food court serves a different purpose:

It gets customers in the door and keeps them shopping longer
It reinforces Costco's value-focused brand identity
It creates fierce customer loyalty (and great publicity)
It ensures hungry shoppers don't leave to eat elsewhere

The hot dog combo is marketing genius disguised as a lunch special.

Forever and Always

In 2024, CFO Gary Millerchip confirmed what members already knew: "The $1.50 hot dog price is safe." Former CFO Richard Galanti went further, stating the price would remain fixed "forever."

Costco sells roughly 100 million hot dog combos each year. At current inflation rates, they're essentially giving away about $290 million in value compared to what the market would bear.

But ask any Costco executive if it's worth it, and they'll tell you the same thing Sinegal would: absolutely. Some prices are too iconic to change.

Related Tags