(NEXSTAR) — Prices of goods on shelves in Costco’s massive warehouses may be boosted by inflation, but at least one food-court deal is going nowhere, the company’s management confirmed.
During an earnings call Thursday, Costco CFO Richard Galanti popped a question about the famous hot-dog-and-soda combo deal, which despite record inflation, still sells for $1.50 at Costco food courts overall land is sold.
A Truist Securities analyst asked Galanti about the “line in the sand” the company drew for the food-court combo, as well as fried chicken, which still retails for $4.99. Galanti said Costco isn’t specifically raising prices in other sectors to offset losses in the food court, but the profit margins they see in the gas and travel sectors make it easier to continue offering the rebate.
“These things help us be more aggressive in other areas, or as you mentioned, hold the price on the hot dog and the soda a little longer,” he said, before quickly correcting himself, “Forever.”
Galanti said while other companies struggled during the height of the COVID-19 pandemic, it brought more people to Costco, and they’re still seeing that benefit years later. “The huge improvement in the bottom line… we’re better than we were two years ago.”
According to Costco, the price of the hot dog and soda combo hasn’t changed since the combo deal was introduced in the mid-1980s.
Costco isn’t the only company to make such a commitment; AriZona recently told Nexstar that despite rising inflation, it has no plans to increase the price of its signature 99-cent canned iced tea.
Consumer goods prices rose 8.3% year over year last month, according to the Bureau of Labor Statistics.
Over the summer, the retailer increased the price of two other food court items: 20-ounce sodas and chicken casseroles. Sodas went from $0.59 to $0.69, and a chicken casserole is now $3.99 instead of $2.99.
Galanti acknowledged membership fees could increase in the future, but the company focused on growing sales before making this change. A basic Costco membership is $60 — and as of 2020, you need one to eat at the food court.
https://www.woodtv.com/news/nexstar-media-wire/costco-cfo-addresses-future-of-1-50-hot-dog-and-soda-deal-on-earnings-call/ Costco's CFO discusses the future of a $1.50 hot dog and soda deal on a conference call