The Costco hot dog meal is indeed a good deal,
but it can't possibly stay that cheap, can it? Well, let's just say, the company co-founder may
be charged with a crime if anyone messes with the price. Details are coming up!
As part of a trial experience back in 1984, Costco's then-hot dog vendor, Hebrew National,
provided the company with a cart to station outside one of its warehouses
to see if it attracted any hungry passersby, according to Reader's Digest.
Things seemed to be going well until 2009 when Costco and Hebrew National split ways.
While consumers were undoubtedly confused and a bit frustrated by this seemingly sudden
occurrence, the reasoning behind the switch had actually been a few years in the making.
Since the mid-'80s, Costco had been using two different kosher hot dog suppliers.
Then in 2007, the kosher meat industry was showing a very steady decline in availability.
This would undoubtedly spur an increase in the price of meat,
prompting Costco to look into creating a Kirkland Signature version of the beloved frank.
Call it divine timing, because in 2008, one of its dog vendors quit the kosher meat business,
and the other shut down altogether. Luckily, the Kirkland Signature dog had been perfected, and in
2009, Costco launched its 100% all-beef franks at its national food courts and in its stores.
Creating a hot dog for Costco's own brand was a major contributing factor in keeping prices down.
It eliminated all the costs associated with having an outside supplier and gave
the company complete control over every aspect of the product. But in order to keep up with demand,
Costco had to figure out a way to continue selling them for the low, low price of $1.50. That's why,
as TheBlueBook explains, the company opened up a factory in Tracy,
California in 2009 to accommodate the increase in hot dog consumption.
Having a new factory helped limit production costs, which ultimately
meant that Costco could continue selling its special combo meal for the same low price.
According to MentalFloss, when the demand for Kirkland Signature hot dogs increased even more,
the company opened up yet another factory in Chicago. Eat This, Not That reported that in 2021,
Costco was selling over 150 million combo meals annually. Not counting the seven holidays the U.S.
locations observe, that comes out to around 419,000 a day. So remember,
if there's any doubt about America's frank infatuation, this should crush that perspective.
Shopping in general is exhausting. Vestibular.org notes that the bright lights can trigger headaches
while crowds can cause anxiety. Ultimately, you're left overwhelmed,
cranky, tired, and incredibly hangry. But Costco has an added annoyance:
Square footage. It's a lot of space to cover. According to Investopedia, the average Costco
warehouse is around 146,000 square feet. So you're undoubtedly going to work up an appetite.
That's why it's great to know you can satisfy your hanger demons after you've finished
shopping or fuel up before you start counting your steps. For only a buck and a half,
you're getting 552 calories for just a dog and a bun without toppings.
The protein and carbs will fuel you as you cruise on autopilot through the winding aisles.
"And that's when we realized Costco is such a vibe."
An instant, inexpensive, filling meal is the least Costco can offer when you
take into consideration the cost of a yearly membership — $60 dollars for the
Gold Star and $120 for the Executive membership.
Costco shines among competitors when it comes to one thing: Advertising. Why? Because,
as Investopedia reveals, other than sending out mailers to current members,
the company doesn't spend any money on advertising to the public at large. According to Statista,
big-box companies like Walmart and Target rely on different forms of advertising — print,
direct mail, television and radio, and digital media to name a few — to reach target consumers.
Costco shoppers almost act as human billboards. After all,
you don't normally see people walking around eating behemoth hot dogs every day.
And when you do, it's usually from the Costco food court.
In an interview with Seattle Times, Costco co-founder
Jim Sinegal says that it's one of the main things the company is known for.
"We have people who have parties at our hot dog stands. Guys in Florida get together and have
T-shirts that have the Costco hot dog on them. We have people who after their wedding party
came over and got a hot dog at one of our warehouses.
We're known for that hot dog. That's something you don't mess with."
Costco is loyal to its customers. The company also takes pride in providing
the little things that bring people joy, like tantalizingly good deals on bacon,
eggs, coffee, rotisserie chicken, and more. But it's not just the prices that build loyalty.
Little snacks — and especially affordable food court items — actually give customers a reason
to visit again and again. In his conversation with Seattle Times, Jim Sinegal explains,
"People look at that hot dog and say, a buck fifty,
this is unbelievable. It's the same thing you'd spend $7 or $8 at the ballpark for
and not get the same quality dog. It's one of the things that we're known for."
People love feeling like they're getting special treatment, and that's why Kirkland
Signature hot dogs don't come at a premium price. Costco knows that the hot dog deal
brings its customers joy — and garners the company more membership renewals. Sinegal adds,
"When you get customers who are that delighted with something,
it's worth your time and energy to make it work."
"Wow, well thank you for the hot dog."
"Oh Martha, it was a dollar fifty."
No matter what, the hot dog combo is something Costco customers
relish. In other words, Costco really cuts the mustard.
425 Business reports that co-founder Jim Sinegal was more than adamant about
keeping the combo meal priced at $1.50. Even raising it by $0.25 was out of the question,
according to Costco CEO Craig Jelinek.
You see, Sinegal takes both the hot dog and customer service just as seriously as Costco
members take shopping for a good deal. If you mess with the mighty Costco hot dog,
you mess with his loyal fan base. So when Jelinek came to him and said that they were losing too
much money by keeping the combo at the $1.50 price point, according to Jelinek, Sinegal said,
"If you raise the effing hot dog, I will kill you. Figure it out."
That's some fearsome dedication, but it seems like the Costco crew figured out the pricing debacle.
Eat This, Not That reports that the hot dog combo meal will continue to
live on at the same price it's always been: $1.50.
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