Costco’s new CFO makes announcement about $1.50 hot dog combo

The Hill ^ | 05/31/24 11:52 AM ET | BY MICHAEL BARTIROMO

[RandFan]

(NEXSTAR) – Gary Millerchip, the new CFO and executive vice president of Costco, shared a frank message with investors and analysts while hosting his very first Costco earnings call on Thursday afternoon.

“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” said Millerchip, shortly after welcoming attendees to the company’s Q3 earnings call.

The price of Costco’s hot-dog-and-soda combo, at $1.50, has remained unchanged since the item was added to menus in the mid-1980s. But recent comments from Richard Galanti, Costco’s former CFO, left some consumers feeling uncertain about the item’s future.

...

The story behind Costco’s popular hot dog — and its unchanging price — can be traced back to Costco co-founder James Sinegal, according to former Costco CEO Craig Jelinek.

“I came to [Sinegal] once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends,’” Jelinek recalled in a 2018 interview with 425 Business. “And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’”

[SuperLuminal]

Of course, the ingredients will still be based on local roadkill...

[9YearLurker]

Costco dogs aren’t too expensive for these civil servants:

https://nypost.com/2024/06/02/opinion/nih-scientists-made-710m-in-royalties-from-drug-makers-a-fact-they-tried-to-hide/

[irishjuggler]

Good post. You’re absolutely right.

[irishjuggler]

See, I’m a Costco member, but I don’t bother with the gasoline. Why? Because at the Costcos in my area, the gas lines are always so damned long. Yes, their gas is usually signficantly cheaper than the local average, but I find that if use GasBuddy.com or other similar, I can find other local stations with prices comparable to Costco’s or perhaps only $0.05 more per gallon... and no lines. If I’m buying say 12 gallons, it makes sense to go to that other station. Saving $0.60 total by waiting around at Costco just isn’t worth it.

[cuban leaf]

Yes. I also remember when Costco dogs came in two types. The one I always got was discontinued. Sadly, so was the sauerkraut.

[MinorityRepublican]

They can raise the price of the membership card if the hot dog is really getting more expensive.

[Harmless Teddy Bear]

There is an old store near where we are that has two things, a hand dipped ice cream counter and a mechanical ride for children for a penny.

Those two things are loss leaders but it brings in people who would not come in other wise.

People come in just to let their kids ride the penny pony and get a cone. But since they are there anyway.....

Getting them in the store is the hard part. Sure you will have a few that will just enjoy your loss leader and leave but a good 95% of the people coming in will buy other things.

[cowboyusa]

Costco Hot Dogs are the best.

[ladyjane]

I used to use GasBuddy but found Costco to be significantly cheaper. Their high test sometimes is $ .60 cheaper and their regular about .50 cheaper. The difference probably varies by area and maybe proximity to the refinery.

We have two Costco locations nearby. One is by an interstate and the other about ten miles away. The one close to the interstate has very long lines. The one located away has short lines, if any. Your Costco may be near an interstate?

[albie]

“ I’m not sure I’d trust a hot dog from Costco.”

…millions do. Just like millions trusted the jab

[Crusher138]

My wife is a shopper...and not in a good way.

It is physically impossible for her to run into a store to buy a specific item. No matter what is on her list when she goes in, there is considerably more in her cart going out. It has gotten to the point that when the budget is tight, she is not allowed to do the shopping.

Costco is the worst. We will be going in for coffee (their bag of espresso beans is excellent and a great bargain) and toilet paper and somehow have $400 worth of “stuff we need” in our basket at checkout.

As for the food counter...we always comment on getting some on the way out, but after emptying our checking account, we rarely do. They do sell the uncooked hotdogs (next to the bacon in our location) and they are a good value.

[Tired of Taxes]

Excellent post. It's all about marketing, which stores like Costco understand. After all, they've deemed their stores "shopping clubs," and they've convinced people to buy a membership for the privilege of shopping there. They know those cheap, yummy lunches keep bringing their customers back.

"The CFO, sitting in his/her office staring at a spreadsheet on a PC knows little about the psychology of the customer roaming the store."

Bingo. When Kmart's business started suffering, it was taken over by a billionaire who knew how to get rich but maybe not how to run a business. I worked a P/T job at one of the stores for a year until it was shut down. The store had a nice collection of clothing and shoes (much better quality than Walmart's) that brought in customers. But, as management explained, headquarters had this policy: When a store started doing poorly, headquarters would punish it by investing less into it. With less and less money, the store did worse and worse. Our store couldn't even afford heat or A/C, so it was cold in the winter and hot in the summer. Customers can see a store going downhill. As fewer people were hired to work there, more merchandise walked out the door, if you know what I mean. Many people blamed Walmart, but Kmart did itself in.