Costco's CEO Just Commented On The Hot Dog Price Hike Rumors

While inflation climbs to record highs, even inexpensive food staples seem to be getting pricier. NBC News noted that even discount store Costco has had to raise prices on some of its notoriously cheaper food court items, with sodas rising from $0.59 to $0.69 and the chicken bake being hiked by $1. However, the company says it is committed to keeping one famously low-priced menu item fixed at its low price: the hot dog-soda combo.

According to CNBC, Costco CEO Craig Jelinek gave a one-word answer when asked if the famous snack would be getting more expensive: "No." According to CNN Business, the price of the combo has been set at $1.50 since the 1980s, though it has long been the subject of speculated price hikes. In 2018, Jelinek recalled former CEO and Costco Co-Founder Jim Sinegal telling him, "If you raise the effing hot dog, I will kill you," prompting the company to find other cost-saving measures.

CNN Business compared the hot dog combo to another inexpensive fan-favorite that has never seen a price increase: Arizona Ice Tea. Through everything, the company has committed to keeping its signature 23-ounce can priced at $0.99, even if it means cutting back in other areas, arguing that it would not be worth alienating customers by increasing the price. For now, the strategy seems to be working. Costco sold 122 million hotdog combos in 2021, while Arizona sells 1 billion ice tea cans per year.

Searching for value

Hot dogs aren't the only thing customers can save on by shopping at the club store. Fox Business reports the company has been attempting to limit how much of its increased costs it passes to its customers. While some price hikes have been unavoidable, a Costco official told Fox the price increases have been focused more on non-food items, though some things — like baked goods and the chicken bake — needed to see dollar increases due to a significant increase in the price of raw materials.

While the chicken bake was raised to $3.99 (per NBC News), CNN Business notes that Costco and Sam's Club have both kept their rotisserie chickens at just under $5, a move noted to make consumers see the stores as a good value, even with their yearly membership fees.

Membership fees are another price that Costco says won't be increasing. CNBC explains that while most of the company's profits actually come from memberships, the chain is not looking to increase its membership fees any time soon. The store usually increases the fees every five to six years, which means another raise should be due by 2023, however, executives have said that is not being considered now, given the strain already being put on consumers by inflation and the continued growth in memberships. 

According to The Motley Fool, the club had 64.4 million membership households as of May 2022, each paying an annual fee of $60.