- Costco has charged $US1.50 for its hot dog and soda combo since 1985, and a quote from Costco founder Jim Sinegal explains why that is.
- When Costco’s current CEO, Craig Jelinek, approached Sinegal about raising the price of the combo, Sinegal told him “I’d kill you” if Jelinek raised the price.
- So Jelinek figured out a solution – stop buying hot dogs from Hebrew National and build factories to make Kirkland Signature hot dogs.
- In a January shareholders meeting, Jelinek said Costco had “no plans to take that hot dog above a buck fifty.”
- Visit Business Insider’s homepage for more stories.
Costco has charged $US1.50 for its iconic hot dog and soda combo since 1985.
An old quote from Costco founder Jim Sinegal about why that is has resurfaced on Twitter after a user posted screenshots from a 2018 Mental Floss article.
When Costco’s current CEO, Craig Jelinek, once approached Sinegal, then the CEO, about raising the price of the hot dog, Sinegal told him, “If you raise the [price of the] effing hot dog, I will kill you. Figure it out.”
In 2009, Jelinek did figure it out. Costco stopped using its longtime hot-dog supplier, Hebrew National, and built a Kirkland Signature hot-dog factory in Los Angeles. It later built another one in Chicago. The new factories reduced the production costs for the hot dog, allowing Costco to continue selling the menu item for $US1.50.
Jelinek told 425Business, a local Seattle are publication, in 2018 that he thought people would still buy the hot dog if the price were raised to $US1.75.
“It would not be that big of a deal. People would still buy [it],” Jelinek told 425Business. “But it’s the mindset that when you think of Costco, you think of the $US1.50 hot dog.”
Jelinek took over as CEO when Sinegal retired in 2012, and the hot dog’s popularity has only grown. In the 2019 fiscal year, Costco sold 151 million hot-dog combos for a total of about $US226.5 million. And Jelinek said in Costco’s shareholder meeting in January that he had no intention of raising the price of the hot dog.
“We have no plans to take that hot dog above a buck fifty,” he told shareholders. “End of story.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.