According to the U.S. government, Bidenflation has raised the cost of a hot dog purchased outside the home by more than seven percent in the last year, to just under $6. Yet Costco, the wholesale club warehouse that is the third largest retailer in the entire world, continues to sell its hot dog and soda combo at $1.50, and has promised it will continue to do so until the end of time.
How can they do that?
Part of the reason is the motivation on the part of one of the owners to remain alive! Jim Sinegal and Jeffrey Brotman opened the first Costco in Seattle in 1983, and began offering the combo a year later. By 2018 the stores were losing money on every one, and when Craig Jelinek, Sinegal’s successor, told Sinegal that “we can’t sell this hot dog for a buck fifty. We are losing our rear ends,” Sinegal replied, “If you raise the [price], I will kill you. Figure it out.”
Jelinek figured it out. He switched soda brands. He changed contractors for the hot dogs and then built a plant to make them in-house. But, in spite of those efforts, currency destruction has overcome those efforts.
Still, the hot dogs remain a staple of the menu in each of the 600+ Costco stores in the United States. And the management continues to keep the price at a buck fifty.
Here are the numbers. Last year Costco’s total revenue, hot dogs and soda included, came in at almost a quarter of a trillion dollars — $242 billion, to be exact. It makes its money selling memberships. Costco now has 132 million members paying $60 per year. Do the math: That’s nearly $8 billion before anyone buys anything!