How Much Costco Hot Dogs Would Cost If It Accounted For Inflation
Whether you shop at Costco or not, chances are you've heard about one of the chain's best deals. We're talking about the hot dog combo at the chain's café, which provides a quarter-pound all-beef dog with a 20-ounce fountain soda for just the shockingly low price of $1.50. That's the very same amount as when the deal was first created back in 1985 when Costco was in its infancy and gas cost just over a buck per gallon.
Against all odds (and inflation), this hot dog price has remained constant. Using the federal government's official CPI data, which tracks prices over time, an item selling for $1.50 back in January 1985 would typically cost approximately $4.32 today. While it would theoretically have nearly tripled in price over the past 38 years, it would still be a relative bargain compared to items at many modern fast-food chains. According to MoneyGeek, the average meal at McDonald's is more than $6 nationwide, while Burger King averages more than $8 and Wendy's tops 10 bucks per order.
A company-wide dedication to cheap dogs
If you're wondering why the company would make such an unusual decision to not raise prices when it comes to such a popular offering, there are a few reasons that Costco's hot dog meal is so cheap. For one, Costco has worked hard to eliminate extra costs from the process, even going as far as building their own hot dog production plant to eliminate middlemen and potential price increases. As such, Costco may make less than it would if it raised prices, but the real value is in providing brand loyalty to the customer.
The idea is that these low-priced deals draw in more shoppers, who then spend their money on other items. Costco knows this fabulous deal also provides incredible free advertising and loyalty from members, encouraging people to sign up for or renew memberships, which is the company's real way of making money.
No one is apparently more dedicated to keeping the price where it is than Costco's founder Jim Sinegal. The current Costco CEO revealed to 425Business that Sinegal profanely (and seemingly jokingly) threatened to kill him if he raised the price. So dedicated Costco shoppers can rest easy — the $1.50 price tag is likely here to stay, no matter where inflation heads in the future.