How Is Costco Still Able To Keep Its Food Court Hot Dog Meal So Cheap?

It's no secret that one of Costco's most popular products is the $1.50 food court hot dog and drink combo — and the retailer is rather protective of that price tag. In a 2018 interview with 425 Business, Costco's then-CEO, Craig Jelinek, recounted co-founder Jim Sinegal's reaction when the hot dog combo price was questioned: "If you raise the effing hot dog, I will kill you." And so far, this threat has held, and the infamously delicious hot dog to which so many treat themselves at the end of an anxiety-inducing shopping trip has stayed the exact same price since it was introduced in the 1980s. But how can the bulk retailer actually pull this off without a major dip in profit, especially amongst rising inflation and supply costs? There are a combination of reasons why the Costco hot dog combo has never wavered in price, starting with the fact that it's very likely a loss-leader for the company.

That is to say, Costco doesn't make any money on the hot dog combo. However, it's so beloved and has earned such a loyal customer base, that when members come to the store to eat one, they're likely not leaving empty handed — they're purchasing other items as well. It is a great branding tactic on Costco's part. This doesn't mean that the bulk retailer doesn't cut costs elsewhere; back in 2008, the company switched from Hebrew National to its own manufacture. It has also raised the price of other food court items in the past, like the chicken bake, sandwiches, and its fountain sodas, which now features Coke products instead of Pepsi.

From time to time, there has been speculation on the internet that major changes to Costco's team may initiate a change in philosophy for the famous food court offering. One Instagram user sent waves of panic — and anger — through the social media sphere when they posted in early February 2025, "Costco CFO Retiring, Could be the end to the $1.50 hot dog deal." The caption named Gary Millerchip, called him a "former Kroger CFO who is known for raising prices to boost profits." The post, which received over 150,000 likes and 3,000 comments, garnered feedback such as, "Changing the price in the Costco food court will be America's last straw," and "Please we can't handle more bad news." Another commenter said grimly, "If Costco touches that hot dog, society unravels. Your move, Costco."

While it is true that Millerchip did step into the CFO role from Kroger, it happened in mid-March 2024, a little less than a year before the Instagram post. Additionally, two months after taking on his position at Costco, Millerchip addressed the rumors about a potential price hike on the food court favorite, confirming, "...the $1.50 hot dog price is safe," (via CBSNews). Of course, that's no absolute guarantee that it won't happen at any point in the future — but at least for now, let your panic subside, and enjoy your cheap, post-shopping snack, with its wide calorie range and array of toppings.