Costco’s $1.50 Hot Dog Deal!
***** Costco’s $1.50 Hot Dog Deal!
i’m gonna assume that you guys know about this Costco ‘Deal”…
Just between us, I love grilled/broiled hot dogs- I’m not a fan of steamed hot dogs (Costco’s hot dogs and buns are steamed)…
That said, I can’t recall the last time I was in a Costco when I didn’t go for the buck-fifty!
Your thoughts on Costco’s $1.50 Hot Dog Deal would be much appreciated.
The hot dog and soda has been priced at $1.50 since 1985. From 1985 to 2008 Costco used Hebrew National Hot Dogs. Personally like you I don’t like steamed dogs.
Not sure if the $1.50 is a loss leader price, but I can’t name any other place today where you can buy a hot dog and soda for such a cheap price.
Jeff,
I know that Costco sells over a 100 million of the dogs every year, but I can’t recall the last time I bought one. I don’t enjoy boiled hot dogs. If they aren’t grilled or broiled they don’t have the texture or snap that I really enjoy.
Why Costco food courts have charged $1.50 for hot dogs since 1985, according to employees
Áine Cain
Apr. 10, 2018, 6:22 AM 71,597
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Costco’s hot dogs have old-school prices. Hollis Johnson
Costco’s food court is famous for its tasty hot dogs.
You’ll be out $1.50 if you order the Costco menu staple with a soda.
The price hasn’t changed since 1985, and there’s a reason for that.
Costco food courts have a famous — and delicious — north star.
That’d be the hot-dog-and-soda combo, which has cost $1.50 since 1985. While Costco menu items vary across the US and around the globe, the hot-dog meal is one major constant.
And the staple isn’t just static — it’s popular. The Daily Meal reports that Costco sells 100 million hot dogs a year.
Employees dig it too. One Costco worker based in San Diego told Business Insider described the combo as a “classic.”
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Business Insider spoke with 36 Costco employees, four of whom said the combo was their go-to food-court order. Two others said it was the best deal in the whole store.
Business Insider’s Hollis Johnson wrote that the hot dog was “easily one of the best hot dogs we’ve tried, at least in terms of fast, cheap food.”
“Our expectations were low,” Johnson said, “so the quality is all the more surprising.”
So what’s Costco’s reasoning for keeping its hot dogs the same price since 1985?
To understand, it helps to know a bit of the history behind Costco’s hot-dog meal — and the retail chain’s food court in general.
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The Costco food court that fans know and love can trace its lineage back to 1984, when the chain decided to stick “a single hot dog cart in front of a San Diego warehouse,” according to David Wight’s article in the March 2009 edition of the company magazine, Costco Connection. An employee named Jay de Geus was tasked with hawking the Hebrew National hot dogs.
From there, Costco launched Cafe 150, named for the price of most of its menu items: $1.50. In 1993, Costco merged with Price Club and inherited that chain’s pizza kitchen too.
In 2008, Costco switched its traditional kosher dogs for Kirkland hot dogs. Wight cited the chain’s inability to square the “availability of kosher raw materials and kosher production-plant capacity” with demand for hot dogs.
While the food changed, the price has remained the same
So what’s Costco getting out of its $1.50 hot dog? Employees have some theories.
An anonymous Costco employee told PopSugar that Costco charged $1.50 for a hot dog and soda “just so your last experience before leaving is one of a pleasant cashier treating you well and giving you a good deal.”
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On Quora, a former competitive buyer at Costco said the food courts were actually “the main contributor to the dividends its shareholders get.”
“Do not think for one minute that Costco does not make a huge margin on food-court products,” Lenin Lobaton wrote. “That is where the profit of Costco comes from. In short, the food court is a gold mine for Costco.”
In response to another question on Quora, Lobaton wrote that “the $1.50 hot dog and soda, pizza, and churros are all bottom-line contributors.”
Other Costco employees say the hot-dog deal is bait for hungry shoppers.
“We do not make money off of our food,” a food-court employee named Josh Smith wrote on Quora. “The $1.50 hot-dog deal is called a ‘loss leader,’ which means that it is used to draw in buyers for other higher-priced items like the chicken bake, brisket sandwich, and our new item, chili.”
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Smith added: “The whole thing is mainly a ‘member service,’ which is just to keep them happy.”
What’s the real answer?
In the 2009 edition of Costco Connection, David Fuller, the assistant vice president of publishing, settled the debate, writing that Costco wanted to prove that “a business can operate on a fair markup and still pay all of its bills.”
“Holding a price that steady for that long sends a clear message about what is possible when you decide to operate your business model on a ‘cost plus’ basis instead of a ‘what the market will bear’ basis,” Fuller wrote.
Are you a Costco employee with a story to share? Email
Love the deal.
It tops off the shopping experience every time.
Terrific deal.
Dog is good beef quality.
Price is beyond right.
I also love their $1.50 pizza deal.
The hot dogs and toppings are great, but I’m really pissed that Costco eliminated my fav treat – the very berry sundae! Delish, cheap and big enough to share,,,now replaced with a “healthy” acai bowl for more than 3 times the price! What are they thinking?!!
I do the Dog Deal every time I go to Costco. Delicious steam dog and steamed bun.
The steamed hot dog in the steamed bun is delicious.
I love the $1.50 Deal. Great price, delicious hot dog and I love the steamed bun. I must tell you that a grilled dog would be even more delicious but I guess it’s too hard to make them in the food court.
Time for Costco to introduce a cheeseburger deal.
MY sister retired in Mexico an one of the local watering holes has a promotion every Wednesday they sell Costco dogs. Its a big draw
Its a loss leader. Just something to increase foot traffic. A marketing tool. Hotdogs and pizza are fairly simple. The Caesar salad they sell is a pretty good deal ($5.00) and the BBQ beef sandwich also good.
Can’t beat the deal and the dog with mustard and kraut are very tasty!