Gary Millerchip, Costco’s new CFO and executive vice president, shared a frank message with investors and analysts on Thursday afternoon while hosting his first earnings call.
“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” said Millerchip, shortly after welcoming attendees to the company’s Q3 earnings call.
The price of Costco’s hot-dog-and-soda combo, at $1.50, has remained unchanged since the item was added to menus in the mid-1980s. But recent comments from Richard Galanti, Costco’s former CFO, left some consumers feeling uncertain about the item’s future.
Galanti, like Millerchip, had frequently discussed the price of the combo deal during Costco’s quarterly earnings calls, and once remarked in 2022 that the $1.50 price would remain in place “forever.” Earlier this year, however, Galanti appeared to indicate that Millerchip could possibly hike the price, telling Bloomberg that the $1.50 combo deal’s price might only be “probably safe for a while” after his departure.
The story behind Costco’s popular hot dog — and its unchanging price — can be traced back to Costco co-founder James Sinegal, according to former Costco CEO Craig Jelinek.
“I came to [Sinegal] once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends,’” Jelinek recalled in a 2018 interview with 425 Business. “And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’”
The company soon began manufacturing its own hot dogs (instead of sourcing them elsewhere) to keep costs down, Jelinek said.
Galanti had also said in previous earnings calls that revenue from other sectors of Costco’s businesses helps to keep costs lower at the food court. If true, the $1.50 hot dog deal may remain in place for the foreseeable future. In its latest earnings report, Costco posted a 9.1% increase in sales over Q3 of 2023, beating expectations.
“We’re seeing wins in several different categories,” Costco CEO Ron Vachris said Thursday.
