Here’s why Costco hot dogs are still only $1.50.

Inflation is usually a kind of phenomenon that gradually grows on people. For example, the price of your favorite cereal might increase from $4.59 per box one year to $4.67 the next year and $4.75 the year after that.

But since mid-2021, the cost of living has increased exponentially, and at a rate that is far too fast. extremely It stands out to consumers. In fact, many people are having a hard time sticking to their budget and avoiding debt given how quickly prices are rising.

But one cost that hasn’t gone up in recent years or even decades is Costco’s hot dog and soda combo. The food court special costs just $1.50, and it’s been that price since the deal was first introduced in 1985.

At first, this may seem like a lost revenue opportunity for Costco. But there’s a specific reason Costco hasn’t raised the price of its hot dog and soda combo, and why it might keep prices current for much longer.

It’s all about retaining and attracting customers

If Costco adjusted the prices of hot dogs and sodas for inflation, the current price would be $4.50 instead of $1.50. Costco knows this too. But the reason Costco is willing to stick to the $1.50 price point is that the hot dog deal is in fact a marketing tool, not an intended moneymaker.

During the last fiscal quarter, Costco earned $1.11 billion in membership fee revenue. This is an increase of $84 million from a year ago.

Clearly, it makes financial sense for Costco to do what it can to grow its membership base and retain its current customers. A great way to do this is to offer an attractive deal, like a $1.50 hot dog and soda combo that’s too good to pass up.

In fact, in the past, even if you were not a Costco member, you could always access the in-store food court and get a quick meal. Now Costco is changing that practice and limiting food court access to members only. So people who want to continue enjoying $1.50 hot dogs will have to pay for a membership, whether it’s a basic membership at $60 per year or an Executive membership at $120 per year.

Should I become a Costco member?

It probably doesn’t make sense to become a Costco member just for a $1.50 hot dog. However, it may make sense to join Costco for general discounts on everything from groceries to household goods to clothing.

What’s really great about Costco is that they support memberships as well as products. So if you purchase a membership and don’t like it or don’t use it, you can cancel and get a refund.

Because of this, you could join Costco, shop there for a few months, and see how much money you’re actually saving. If it outweighs the cost of your membership, you may find that keeping it is a no-brainer.

Like all retailers, Costco’s goal is to make money. And hot dog trading is not a revenue generator. But it doesn’t have to be that way.

As long as Costco can keep collecting membership fees, it can continue to offer the super low prices it is known for and enjoy a world of success. So think of the $1.50 hot dog and soda deal as a way for Costco to thank its customers for all their business.

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