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 United States 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] 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. [4] It is sold as part of a combo deal with a 20 U.S. fl oz (590 mL) soda. [5]
In 2008, Costco began using its own hot dog factories, reducing supply chain costs. [5] A Costco meat processing facility in Tracy, California, that had been around since 2004 [6] 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. [7]
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. [8]
As of 2018, Costco sold a yearly average of 135 million hot dogs, [9] 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." [10]
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). [11] In Canada, the price for a hot dog and soda with refills is C$1.50. [12] In Mexico, the hot dog is made of 100% beef and includes a drink (with refills) for MXN$30. [13] In the UK, the hot dog is also made from beef and customers also get a drink (with refills) for £1.50. [14] 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. [15]
The hot dog and soda combo deal has developed a cult following. [16] Several t-shirt designs are sold online that celebrate the food court sign advertising the combo. [17]
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." [18]
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." [9]
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. [19]
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." [18]
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." [20]
Some commentators and employees have called the hot dog a loss leader, drawing in enough customers to compensate for lost profits. [21] 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. [22]
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. [21] [23]
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.
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box warehouse club retail stores. As of 2023, 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.
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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.
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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.
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James D. Sinegal is an American billionaire businessman and the co-founder 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, New York, part of Oyster Bay, New York.
The white hot is a variation on the hot dog found primarily in the Rochester, New York area, as well as other parts of Western New York and Central New York. It is composed of a combination of uncured and unsmoked pork, beef, and veal; the lack of smoking or curing allows the meat to retain a naturally white color. White hots usually contain mustard and other spices, and often include a dairy component such as nonfat dry milk.
Dog meat is the flesh and other edible parts derived from dogs. Historically, human consumption of dog meat has been recorded in many parts of the world.
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.
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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.
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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.