Costco’s $1.50 hot dog price is ‘safe’

Nathaniel Meyersohn, CNN

NEW YORK (CNN) — Costco’s caller main financial serviceman has a reassuring connection for inflation-weary customers: don’t interest astir nan value of nan $1.50 basking dog-soda combo.

“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” Costco CFO Gary Millerchip said connected an net telephone pinch analysts Thursday. It was Millerchip’s first net telephone pinch analysts since taking complete for Richard Galanti, Costco’s colorful finance main of astir 4 decades and the longest-serving CFO of a awesome US nationalist company.

With Costco’s activity alteration — and different longtime deals for illustration Trader Joe’s 19-cent bananas and Planet Fitness’ $10 membership ending amid rising ostentation — immoderate had speculated astir nan early of Costco’s $1.50 basking dog. The value has remained nan aforesaid since 1985.

If Costco’s basking canine woody kept gait pinch inflation, it would beryllium 3 times arsenic costly coming — astir $4.50. But Costco’s $1.50 combo is simply a strategical decision, known arsenic a loss-leader: The institution is consenting to suffer money trading nan basking dogs astatine that value arsenic agelong arsenic it helps Costco tie successful and clasp customers.

RELATED | Behind Costco’s $1.50 basking canine strategy

It’d beryllium an overseas clip to raise prices, anyway. Other companies, specified arsenic Walmart and Target, person been cutting prices connected thousands of items to tie successful shoppers who are progressively fed up pinch rising costs.

The $1.50 basking canine is simply a powerful trading instrumentality for Costco and is synonymous pinch Costco’s brand.

“I cognize it sounds crazy making a large woody astir a basking dog, but we walk a batch of clip connected it,” Costco co-founder Jim Sinegal told the Seattle Times in 2009. “We’re known for that basking dog. That’s thing you don’t messiness with.”

Sinegal besides famously erstwhile said, “If you raise nan effing basking dog, I will termination you. Figure it out,” according to erstwhile CEO Craig Jelinek.

Costco offsets basking canine losses by expanding prices of pizzas and different items astatine its nutrient courts and cutting costs.

It besides precocious added cocoa spot cookies to its nutrient tribunal menu. The $2.49 double cocoa chunk cooky has been a “continued success,” Millerchip said Thursday.