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0 pointsndjdjddjsjj1y ago0 comments

It does feel like a case of the Costco hotdog going up to $2 followed by "grrrr. Thats it! I'm..... going to keep buying it because it is still damn cheap!"

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8 comments · 2 top-level

BrutalCoding1y ago· 3 in thread

I remember reading something about the Costco hot dog story, quite funny IMO, here's what I just found from 2018: "I came to (Jim Sinegal) once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends.’ And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’ That’s all I really needed. By the way, if you raised (the price) to $1.75, it would not be that big of a deal. People would still buy (it). But it’s the mindset that when you think of Costco, you think of the $1.50 hot dog (and soda)." [1].

Turns out Costco has a new CEO this year, and again the hot dog topic came to light apparently, lol. This article is from 2024: "'To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,' Millerchip said." [2].

Sources:

[1] https://www.425business.com/news/costco-ceo-craig-jelinek-on...

[2] https://www.usatoday.com/story/money/shopping/2024/05/31/cos...

Aurornis1y ago

These stories are marketing mythology.

Think about. Imagine they sell 100 hot dogs per hour. A $0.25 difference means $25/hr in a store doing many orders of magnitude more revenue each hour.

It’s nothing. The way they play it up in the media gets a lot of attention and builds goodwill, but it’s entirely meaningless to their bottom line.

It’s amazing that people eat these stories up, though. I’ve heard so many people repeating this story as if it’s some amazing secret.

immibis1y ago

When the price does increase, you'll know that there's a new CEO who's lost all connection to reality (in the same way that always happens when you put a person in front of an abstraction without obvious leaks).

Moru1y ago

It's also Free Marketing worldwide. Can't compete with that price.

8n4vidtmkvmk1y ago· 3 in thread

Wait what? Did they actually raise the hotdog price?

I never buy the hotdog but a price raise is indicative of bad times to come.

kadoban1y ago

Costco hotdogs have been underpriced for decades. It's an intentional choice, a loss leader. It raising would be mostly meaningless.

But no, last I looked a week ago or so it was still the same price.

gamblor9561y ago

It's not a loss leader. They still make a profit on the combo because the ingredients are cheap and it takes almost no labor to prepare on a per-dog basis.

And 1.50 is cheap now but was relatively expensive when the combo launched in 1985 (for comparison, a Big Mac combo with fries and a drink was 2.59, a KFC combo was around $3).

Aurornis1y ago

It’s a warmed hot dog, a bun, some self-serve condiments, and it’s served by people who can do hundreds of them an hour.

$1.50 might very well cover the cost, but even if it’s a loss leader then it’s entirely negligible.

The mythology around the hot dog price makes people think they’re getting a screaming deal, though. It’s perfect marketing material.

j / k navigate · click thread line to collapse

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8 comments · 2 top-level

BrutalCoding1y ago· 3 in thread

Sources:

[1] https://www.425business.com/news/costco-ceo-craig-jelinek-on...

[2] https://www.usatoday.com/story/money/shopping/2024/05/31/cos...

Aurornis1y ago

These stories are marketing mythology.

Think about. Imagine they sell 100 hot dogs per hour. A $0.25 difference means $25/hr in a store doing many orders of magnitude more revenue each hour.

It’s nothing. The way they play it up in the media gets a lot of attention and builds goodwill, but it’s entirely meaningless to their bottom line.

It’s amazing that people eat these stories up, though. I’ve heard so many people repeating this story as if it’s some amazing secret.

immibis1y ago

Moru1y ago

It's also Free Marketing worldwide. Can't compete with that price.

8n4vidtmkvmk1y ago· 3 in thread

Wait what? Did they actually raise the hotdog price?

I never buy the hotdog but a price raise is indicative of bad times to come.

kadoban1y ago

Costco hotdogs have been underpriced for decades. It's an intentional choice, a loss leader. It raising would be mostly meaningless.

But no, last I looked a week ago or so it was still the same price.

gamblor9561y ago

It's not a loss leader. They still make a profit on the combo because the ingredients are cheap and it takes almost no labor to prepare on a per-dog basis.

And 1.50 is cheap now but was relatively expensive when the combo launched in 1985 (for comparison, a Big Mac combo with fries and a drink was 2.59, a KFC combo was around $3).

Aurornis1y ago

It’s a warmed hot dog, a bun, some self-serve condiments, and it’s served by people who can do hundreds of them an hour.

$1.50 might very well cover the cost, but even if it’s a loss leader then it’s entirely negligible.

The mythology around the hot dog price makes people think they’re getting a screaming deal, though. It’s perfect marketing material.

j / k navigate · click thread line to collapse