In the Midst of Crippling Inflation, the Costco Hot Dog Is the Hero We’ve Been Searching for

Inflation is out of control, with the price of just about everything skyrocketing for consumers. Groceries now cost Americans around 25%  more than they did at the start of Covid. Egg prices, in particular, have shot up a whopping 83% since October 2019. Rent prices have also seen a dramatic increase of 33% since 2020. 

As trends continue in an unfavorable direction, there seems to be no relief from the rising costs of living. But there is one place where Americans can find a tiny slice of solace from inflation. 

Within the concrete oasis of giant cereal boxes and gallon containers of mayo, Costco has managed to shield one American staple from inflation: The hot dog. 

The Top Dog

Growing up in a big family, Costco was a necessity for us. I don’t know why my memories of accompanying my mother to the store are so whimsical, but perhaps it is because there is really no other place on earth where you can buy eggs, books, clothing, tires, and even coffins all in one place. To use a quote from the show Modern Family, “They sell baby formula and they sell coffins. You can literally buy everything you need from birth to death.”

But the best part of the shopping trip was what came at the end. Beyond the checkout lines, shoppers will find the Costco food court, which looks more like a concession stand at a baseball game then something you might find at the mall. The outdated,and absurdly large signage displays pictures that hang so high on the walls, you can see it from across the building. As a kid, those posters were like a lighthouse signaling the end of a journey. If I close my eyes I can perfectly envision the sign showcasing the hot dog with bold lettering declaring that one all-beef hotdog and a 20 oz soda were only $1.50. While a lot has changed since then, one thing that has not changed is the price of that hot dog. 

How did they manage to keep the price the same for almost 40 years? According to Costco history, it all comes down to a stern threat. Legend has it that when former CEO Craig Jelinek took over, he went to his predecessor and Costco co-founder, James Sinegal, to discuss the price of the hot dogs. He brought up the possibility of raising the cost, to which Sinegal replied, “If you raise the effing hot dog, I will kill you.” 

This is the story according to an interview Jelinek gave in 2018. As to whether or not this really happened, no one knows. But we do know that Costco has never once budged on the price of its hot dogs. 

If the company had decided to adjust their costs for inflation, it would be something around $4.40 today, which is still more affordable than most food court items today. But it’s not just the hot dog prices that stayed the same. Costco’s food courts sell other crowd favorites like their gigantic slices of pizza for $2.99 and their full 18 inch pie for only $9.99. There are also smoothies, frozen yogurt, chicken bake, and other items for purchase all under $5. 

Earlier this year, an ugly rumor spread that Costco would be raising their prices due to inflation and public outrage ensued. Thankfully this was, of course, just a rumor. Some might wonder how Costco has been able to honor Sinegal’s promise to consumers without suffering financial losses. It all boils down to customer loyalty. 

Loyalty Is Priceless 

Costco is known for their hotdogs and their customers love them for it. It’s a focal point of their branding. This loyalty on the part of consumers is enough to fuel them to renew their annual $65-$130 memberships even if they aren’t regularly buying their groceries in the store–I am speaking from firsthand experience here. Last year, Costco sold about 200 million hot dogs. While the sodium content of that amount is frightening to imagine, there is something so comforting in knowing that while the economy might seem to be crashing down all around us, there will always be a place where hot dogs and a soda remain affordable. 

Politicians make a lot of promises about lowering prices and stopping inflation–neither of which is within their control. But in a very small way, Costco has managed to combat inflation without any mandate or regulatory arm of the government telling it to do so. The Costco hot dog is a fun and delicious reminder of what can happen when private businesses are allowed to respond to consumer demand without any sort of government regulation or price controls.