The Costco Hot Dog is a 1⁄4 lb (110 g) hot dog sold at the international warehouse club Costco's food courts. It is notable for its price, which has remained steady at $1.50 in a combo deal including a soda at North American locations since its introduction in 1984. That price has become increasingly low relative to inflation and spawned a cult following.
The Costco hot dog was introduced to food courts in 1984, [1] one year after Costco's opening in 1983. [2] The original hot dog was made by Hebrew National, [3] and was sold at a hot dog cart outside a Costco location in San Diego. The price was set at $1.50 at its introduction, and has remained at $1.50 ever since. [1] As of 2024 [update] , the hot dog combo would cost approximately $4.40 if the price were adjusted to match inflation since 1984. [4] The product varies across countries; the U.S. version consists of a Kirkland brand wiener, some warehouses selling it with a sesame bun, some selling it with a plain bun. [5] It is sold as part of a combo deal with a 20 U.S. fl oz (590 mL) soda. [6]
In 2008, Costco began using its own hot dog factories, reducing supply chain costs. [6] A Costco meat processing facility in Tracy, California, that had been around since 2004 [7] began producing hot dogs in 2011, and produced both the hot dogs sold in the food court as well as smaller hot dogs sold in packs. The switch also ushered in the usage of non-kosher beef. Another facility was opened in Morris, Illinois in 2018. [8]
The soda fountains at the Costco food courts were stocked with Coca-Cola products until 2013, when Costco switched to Pepsi products as a cost savings measure for the combo. [9]
As of 2018, Costco sold a yearly average of 135 million hot dogs, [10] more than every Major League Baseball stadium combined. [3]
In 2022, Costco CFO Richard Galanti stated that Costco intends to keep the combo deal's price constant "forever." [11] Galanti's replacement Gary Millerchip stated in May 2024 that the price is "safe." [12]
In the U.S., the hot dog and soda combo deal costs $1.50 (USD). In Australia and New Zealand, the hot dog is made of pork and is sold with a large soda for $1.99 (AUD/NZD). [13] In Canada, the price for a hot dog and soda with refills is C$1.50. [14] In Mexico, the hot dog is made of 100% beef and includes a drink (with refills) for MXN$30. [15] In the UK, the hot dog is also made from beef and customers also get a drink (with refills) for £1.50. [16] In Taiwan and Japan, the hot dog is made of pork. Japan's price for their 120 g (4.2 oz) hot dog and refillable 600 ml (20 U.S. fl oz) drink is ¥180. [17]
The hot dog and soda combo deal has developed a cult following. [18] Several t-shirt designs are sold online that celebrate the food court sign advertising the combo. [19]
In 2009, the Seattle Times asked Costco co-founder (and then-CEO) Jim Sinegal, "If [the price of the hot dog] ever goes up, what will it mean?" Sinegal replied, "That I'm dead." [20]
Craig Jelinek, Sinegal's successor as CEO, revealed in 2018 that he approached Sinegal about raising the price of the hot dog combo, saying, "Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends." According to Jelinek, Sinegal replied, "If you raise the effing hot dog, I will kill you. Figure it out." [10]
Sam's Club, a Costco competitor, reduced the price of its hot dog and soda combo deal to $1.38 in November 2022 in an attempt to compete with the Costco hot dog. [21]
Several explanations exist as to why Costco chooses to continue to sell its hot dog combo at an unusually low price point.
When asked why the price of the hot dog was significant to him, Jim Sinegal said, "Because everybody talks about it. People look at that hot dog and say a buck fifty, this is unbelievable." He continued, "We're known for that hot dog. That's something you don't mess with." [20]
According to David Fuller, assistant vice president of publishing, "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." Costco vice-president Bob Nelson stated that "It epitomizes the value that we stand for." [22]
Some commentators and employees have called the hot dog a loss leader, drawing in enough customers to compensate for lost profits. [23] Costco CFO Richard Galanti did not directly confirm or deny this theory, but commented that "Needless to say we aren't making a lot or any" profit on food court products. [24]
Some have also theorized that the popularity of the food court, which is located near the entrance at Costco locations, creates a welcoming atmosphere, luring in more customers and encouraging customer retention. [23] [25]
A hot dog is a dish consisting of a grilled, steamed, or boiled sausage served in the slit of a partially sliced bun. The term hot dog can refer to the sausage itself. The sausage used is a wiener or a frankfurter. The names of these sausages commonly refer to their assembled dish. Hot dog preparation and condiments vary worldwide. Typical condiments include mustard, ketchup, relish, onions in tomato sauce, and cheese sauce. Other toppings include sauerkraut, diced onions, jalapeños, chili, grated cheese, coleslaw, bacon and olives. Hot dog variants include the corn dog and pigs in a blanket. The hot dog's cultural traditions include the Nathan's Hot Dog Eating Contest and the Oscar Mayer Wienermobile.
A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. With this sales promotion/marketing strategy, a "leader" is any popular article, i.e., sold at a low price to attract customers.
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box warehouse club retail stores. As of 2021, Costco is the third-largest retailer in the world and is the world's largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine as of 2016. Costco is ranked #11 on the Fortune 500 rankings of the largest United States corporations by total revenue. Costco uses a club warehouse wholesale retailer channel of distribution while also selling their private label brand directly to consumers.
A corn dog is a sausage on a stick that has been coated in a thick layer of cornmeal batter and deep fried. It originated in the United States and is commonly found in American cuisine.
Roast chicken is chicken prepared as food by roasting whether in a home kitchen, over a fire, or with a rotisserie. Generally, the chicken is roasted with its own fat and juices by circulating the meat during roasting, and therefore, are usually cooked exposed to fire or heat with some type of rotary grill so that the circulation of these fats and juices is as efficient as possible. Roast chicken is a dish that appears in a wide variety of cuisines worldwide.
Sol Price was an American retailer and the founder of FedMart, Price Club and PriceSmart. He was considered the "father" of the "warehouse store" retail model.
A warehouse club is a retail store, usually selling a wide variety of merchandise, in which customers may buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. They are distinguished from traditional cash-and-carry wholesale businesses in that their warehouses are substantially larger in size, and they do not cater purely to businesses but also allow some or all types of consumers to obtain memberships. They are also distinguished from warehouse stores in that they usually charge annual membership fees, and require presentation of proof of membership at the warehouse entrance and again at the point of sale.
A danger dog is a hot dog that has been wrapped in bacon and deep-fried. It is served on a hot dog bun with various toppings. Also known as a bacon-wrapped hot dog, it was first sold by street vendors in Mexico. Its origin has been placed in either Tijuana or Hermosillo, where it was originally served in a bolillo instead of a hot dog bun. These dogs are sold from carts that are ubiquitous along Avenida Revolución and the area surrounding the border in Tijuana, as well as the bar district in Ensenada.
The Dodger Dog is a hot dog named after the Major League Baseball franchise that sells them, the Los Angeles Dodgers. It is a 10-inch pork wiener wrapped in a steamed bun. The hot dog is sold at Dodger Stadium located in Los Angeles, California. According to the National Hot Dog and Sausage Council, the projected number of 2011 season hot dogs sold at Dodger Stadium was 2 million—establishing Dodger Dogs as the leader in hot dog sales of all those sold in Major League Baseball ballparks.
James D. Sinegal is an American billionaire businessman and cofounder and former CEO of the Costco Wholesale Corporation, an international retail chain. He served as Costco's president and CEO from 1983 until 2011. As CEO of Costco, Sinegal was known for his hands-on humanitarian approach to business, which he learned from his mentor, Sol Price. He prioritized customer and employee satisfaction over shareholder interests and is also known for his philanthropic efforts.
Nathan's Famous, Inc. is an American company that operates a chain of fast-food restaurants specializing in hot dogs. The original Nathan's restaurant stands at the corner of Surf and Stillwell Avenues in the Coney Island neighborhood of Brooklyn, New York City. The company's headquarters are at One Jericho Plaza in Jericho, part of Oyster Bay, New York.
Different areas of the world have local variations on the hot dog, in the type of meat used, the condiments added, and its means of preparation.
Gray's Papaya is a hot dog restaurant located at 2090 Broadway at 72nd Street in New York City. It had other locations, all of which had closed by June 2020. Gray's Papaya is famous for its inexpensive high-quality hot dogs, considered among the best in New York City. They once sold for 50 cents each and, as of 2023, sell for $2.95.
Papaya King is a fast food restaurant on the Upper East Side of Manhattan in New York City.
A hot dog cart is a specialized mobile food stand for preparing and selling street food, specifically hot dogs, to passersby. In some jurisdictions, a cart operator must meet stringent health regulations designed to protect the public. Hot dog carts are quick and easy food services, supplying millions of people with food every day. In 2015 the U.S. Hot Dog Council estimated that 15% of the approximately 10 billion hot dogs consumed by Americans in 2014 were purchased from a mobile hot dog vendor cart. Hot dog carts are very common in New York City, and most of the hot dogs purveyed by hot dog carts in New York City are sourced from Sabrett.
A Seattle-style hot dog, locally referred to as a Seattle Dog, is a hot dog served in a bun slathered with cream cheese. In Seattle the dogs are sold from food carts, especially outside stadiums on game day and as a late-night meal outside the city's music venues.
Free refills occur when a drink's receptacle, usually that of a soft drink, tea or coffee, is allowed to be filled again by its purchaser, free of charge, after they have consumed the drink. Occasionally the glass or cup holding the drink is not reused, and the "refill" actually constitutes the acquisition of a second additional entirely new drink(s) for no added charge, usually of the same kind as the original, paid-for drink. Free refills are commonplace in the United States and Canada in traditional restaurants and fast food restaurants, while rarer in airports, cafés, or service stations. Around the world, the availability of free refills is typically scarce, but varies widely depending on the country and the type and specific ownership or chain of each establishment.
Rotisserie chicken is a chicken dish that is cooked on a rotisserie by using direct heat in which the chicken is placed next to the heat source.
Walter Craig Jelinek is an American businessman who served as president and CEO of Costco from 2012 to 2023, when he succeeded the company's founder, James Sinegal.