The Real Reason Costco Hot Dogs Are So Cheap

While some shop at Costco because they really want to stock up on entire pallets of toilet paper (hey, you never know when a snowstorm or a pandemic is going to hit) or snarf down a huge-yet-cheap sheet cake or even score some vodka that's better than overhyped Grey Goose, still others — and you know who you are — go there primarily to hit the food court. And what's a trip to Costco without their signature deal — the justifiably world-renowned $1 hot dog? Or, even better, the $1.50 hot dog and soda combo. Okay, some are still mourning the demise of the Costco Polish dog, but get over it, it's been gone for two years and it ain't coming back.

One thing Costco shoppers may occasionally ponder, as they wait in line to get their tubular treats, is, what makes Costco's hot dogs so cheap? Is there something wrong with them? Is there something we should maybe know before taking that first delicious bite? No worries. One reason they're cheap is that hot dogs themselves are cheap. They're what you serve at a backyard barbecue if you want to invite the whole neighborhood and your last name isn't Musk, Gates, or Trump, and they're what you'll most likely be served at your kid's Little League picnic or elementary school carnival for the exact same reason. 

The main reason Costco keeps selling its hot dogs for the same low price, however, is because they want you to keep coming back for more.

Costco benefits from selling cheap hot dogs

Reader's Digest provides the backstory regarding Costco's amazing hot dog deal — in 1984, a Hebrew National hot dog vendor set up a cart outside a San Diego Costco, thus providing the warehouse chain's first-ever food court. The price charged for a hot dog and soda combo some 35-plus years back in the mists of time? A buck fifty. Yep, same exact price as today. Oh, and it gets even better, too — the Kirkland hot dogs Costco sells today, while still all-beef, are actually 10 percent bigger than the Hebrew National ones. The soda, too, has been supersized — it was originally a 12-ounce can, but today is a 20-ounce cup that comes with free refills.

So why does Costco do it? Why are they practically giving away all this food? Well, because it keeps people coming in the door. Even though once upon a time (prior to mid-March 2020) Costco's food courts allowed non-members to dine in, their food court deals helped justify the steep yearly fees paid by those who also wanted to shop the warehouse and served to entice non-members into possibly deciding to join the club. Yet another reason why Costco offers low-priced, yet tempting, meal options including its famously cheap pizza is that they tempt shoppers to come in hungry, thus more inclined to load up their grocery carts before reaching the tasty reward that lies at the end of the checkout lane rainbow.