The Actual Reason Costco's Hot Dog And Soda Combo Is $1.50
It's no secret that 2020 has been an absolute dumpster fire. A global pandemic, a murder hornet scare, the heartbreaking deception of everything on Twitter being made of cake for like a month. It's been a horrible year filled with terrifying catastrophe after horrifying imbroglio. Yet through it all, one beacon of hope has remained steadfast: Costco's $1.50 hot dog and soda combo. A truly ironclad institution, this deal has stood the test of time, the only positive constant throughout the waking nightmare that has been the past 365 days.
But why, exactly is this famed lunch combo so resilient, maintaining its iconic $1.50 price since its 1984 introduction? Well reader, let me tell you a little story. One day many years ago, Costco President W. Craig Jelinek decided to broach the issue of the combo's economic impact with the warehouse chain's former CEO and co-founder, Jim Sinegal.
"Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends," Jelinek recalled of the conversation.
In his reply, Sinegal did not mince words: "If you raise [the price of] the effing hot dog, I will kill you," the former exec said. "Figure it out."
So how exactly has this deal remained so pervasive, surviving 34 years, six presidents, and spanning into 5 decades? It all comes down to a frankly ingenious marketing philosophy. Think about it: this deal has remained a social constant since the release of Ghostbusters. While they could up the price, and people would buy it, is it really worth losing that legacy? An uptick in price, even as small as 25 cents, would be a lasting blow, a breach in an unspoken pact that one dollar and two quarters can get you an affordable wurst and a carbonated beverage at any of Costco's 785 locations. It's the kind of covenant that threatens to unleash an ancient witch if ever reneged.
All that said, financially keeping this deal intact has taken a bit of creativity, moving hot dog production in house and switching from Coke to Pepsi in 2013. But it's good to know that billion-dollar corporations operate on the logic of executives whose unflagging zeal to keep a hot dog and a soda cheap leads to casual death threats. And several billion years from now, a hot dog and a soda will cost $1.50 at Costco, at least until the Sun consumes the Earth in a cleansing fire.