Costco’s iconic hot dog combo might cost $1.50 forever. Here’s why

Hot dogs fans have nothing to fear – Costco has no plans to raise the price of its iconic $1.50 frank combo.

Despite inflation pushing menu prices up for big fast food chains, Costco has been steadfast in its pricing strategy for the hotdog-and-soda combo since it was first introduced in 1984. If adjusted for inflation, Costco’s famed combo would cost about $4.40 today

There has been frequently been idle speculation about the fate of the hotdog meal and whether it would stay that price forever. Back in March, Richard Galanti, the company’s then chief financial officer, told Bloomberg in an interview before his departure that the price of the combo was “probably safe for a while.”

That statement was recently clarified by Costco’s new chief financial officer, Gary Millerchip. during the company’s earnings call in May.

“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” Millerchip, former CFO of Kroger, told investors.

Not all of Costco’s food court staples have faced the same fate as the hotdog combo. Back in 2022, inflation forced the warehouse retailer to increase the price of some its offerings, such as the chicken bake and 20 ounce sodas.

As consumers deal with elevated inflation and falling grocery prices, Costco stands to benefit, even if it has to eat those costs elsewhere, according to Mickey Chadha, a vice president at Moody’s. Chadha said that in Costco’s case, the retailer has done well because it offers a value proposition to customers.

Roland M. Vachris, Costco’s chief executive officer, is well aware of the company’s foothold among consumers in search of the retailer’s food court offerings. Vachris said during the company’s earnings call in May that the retailer has been able to maintain the its hotdog and coke at $1.50 because of “vertical integration and sourcing as the need arises.”

Vachris said that in order for Costco to maintain the hotdog price combo at that level it has had to open its own meat plants. “We had to get involved because we didn’t have a partner that was willing to expand into that area.” Costco took that same approach with optical lenses and chicken, he said.

The membership-only retailer is also seeing a robust demand for its grocery and baked goods. Last week, Costco’s stock reached an all time high, which it said was due to lower prices and the introduction of new items, including honey buns and lemon blueberry loaf bread.