Will Costco’s Popular Hot Dog Combo Stay at $1.50? The CEO Tells All
In a country seemingly full of green deals, the price of a hot dog and soda at Costco hasn’t changed in 40 years.
While participating in a viral CEO taste test video, Costco head honcho Ron Vachris said it won’t be anytime soon.
Like the heads of Burger King, Wendy’s and KFC who jumped on the bandwagon after McDonald’s CEO Chris Kempczinski indulged in the new XXL Big Arch burger, Vachris was filmed in the Costco store food court rolling gloriously.
“The price of a hot dog will not change as long as I’m here,” he said. “Amazing quality, amazing value.”
McDonald’s has its golden arches, Nike the swoosh and Walt Disney’s castle – symbols of their unique status in American life. Costco has its $1.50 hot-dog-and-soda deal, which is still a popular item in its grocery store, especially now that higher prices are eating into household budgets. In fiscal year 2025, Costco set a new record, selling more than 245 million hot dog combos.
“Saying that hotdog prices won’t go up is like Costco renewing its promise to provide value to the American people,” said Neil Saunders, managing director of GlobalData Retail. “The price of the hotdog meal is Costco’s trademark, and it’s something they are determined to protect at all costs.”
How Good of a Costco Combo Deal?
How good is the hot dog combo? Even as many take-out and to-go foods have risen with the cost of living, the Costco hot dog has not.
If the popular combo were adjusted for inflation, that $1.50 deal would set you back $4.65 today, three times that amount.
It has few similarities except the 99¢ can of AriZona tea that has slipped under the hood since the company’s founding in 1992. Even Trader Joe’s 19 cent bananas could not be suppressed by the market.
Costco Keeps Hot Dog Prices Low
It may seem like a no-brainer, but to Costco’s bean counters, the hot dog combo deal is a smart move.
The hot dog deal drives loyalty — and that loyalty is measured in membership fees. Membership fees account for approximately 64% of Costco’s revenue by 2025.
History of the Costco Hot Dog Combo
Costco’s contract to hedge inflation began with a single hot cart parked outside a warehouse in Portland, Oregon, in 1985.
Joe Portera, then the general manager, allowed a salesman called “Warm Wonderful Gene” to set up shop there without getting approval from Costco corporate. Managers at the home office liked the idea, and not only did they let it slide, they expanded on it, according to David and Susan Schwartz.
The husband-and-wife team chronicled the history of the Costco hot dog in “The Joy of Costco: A Treasure Hunt from A to Z.” They self-published the book in 2023 under the name Hot Dog Press in honor of Susan’s late father, who loved hot dogs, and the importance of the $1.50 hot dog deal to Costco’s success.
It was so important, in fact, that Costco’s food court was originally called Cafe 150 in honor of the low, low price of the hot dog combo, they said.
Will the Hot Dog Combo Price Go Up?
At a business lunch in 2018, W. Craig Jelinek, who became Costco’s CEO, recalls going to his boss at the time, Costco founder Jim Sinegal, to suggest raising prices because “we were losing our bottom line.” He said, ‘If you pick up a hot dog, I’ll kill you.
Jelinek did. In 2008, Costco moved away from Hebrew National, which was raising prices, and began making its own hot dogs at a plant in California and later one in Illinois.
“We’re keeping it at $1.50 and making enough money to get a reasonable return,” Jelinek said in an interview in 2018.
Over the years, Costco has struggled with beverages and condiments to maintain prices.
This article first appeared in USA TODAY: Will Costco’s popular hot dog combo stay at $1.50? The CEO tells all
Reporting by Jessica Guynn, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
