Costco’s inflation-proof hot dog deal turns 40
In the fiscal year 2025, Costco set a new record, selling more than 245 million hot dog combos.
Content creator Joey Kinsley has pulled quite a few gut-busting feats.
He ate chili every hour for 24 hours and once consumed only potato chips for 48 hours. None of these stunts went more viral than when Kinsley dined on nothing but Costco hot dogs for seven straight days.
The price tag for bingeing 29 hot dogs dolled up with ketchup, mustard and relish and washed down with a Pepsi or Mountain Dew? $43.50 (plus the cost of the membership) and some “extreme indigestion.” Pepto Bismol and Tums each sent him care packages.
“I always say in my videos, ‘Please do not try this at home,’” said Kinsley who goes by Sir Yacht. “But that definitely launched my YouTube thing.”
McDonald’s has its golden arches, Nike the swoosh and Walt Disney a castle – symbols of their iconic status in American life.
Costco has its $1.50 hot-dog-and-soda deal. And the combo has never been more popular than on its 40th anniversary. In the fiscal year 2025, Costco set a new record, selling more than 245 million hot dog combos.
With good reason. In a world seemingly stuffed with raw deals, a hot dog and a soda at Costco costs about the same as a few budget-friendly servings of home-cooked beans and rice.
What other meal can you afford with the spare change scrounged from your sofa cushions? One YouTuber dubbed it “THE BEST DEAL ON EARTH.”
For Kinsley, whose stunts include traveling to all 50 state capitals in 30 days, no other food challenge has been the bargain Costco was. He spent more on gas getting to the nearest warehouse than he did on Costco’s most popular food court item.
Costco’s inflation-busting combo
What makes the combo truly unique? In all its years of hawking food court franks, Costco hasn’t raised the price since the 1980s – even as the median price of grab-and-go meals has soared with inflation.
A burger is $14.53, up 3.2% year-over-year, according to Toast’s October Menu Price Monitor, which keeps tabs on how inflation is hoisting restaurant prices. A burrito is up 3.3% to $13.43.
Had the Costco hot-dog-and-soda combo kept pace with inflation, that $1.50 deal would set you back $4.62 today, more than three times as much. It would still be a relative bargain, with few parallels apart from AriZona’s 99¢ can of iced tea that has skated under a buck since the company’s founding in 1992. Not even Trader Joe’s 19-cent bananas have been immune from market pressures.
Analysts say the billowing scent of hot dogs that emanates daily from the warehouse food court is a constant reminder of Costco’s commitment to delivering value at a time when American shoppers are fed up with nosebleed prices and constant scrimping.
Some shoppers even pose for their Costco membership card picture holding or biting into a hot dog.
“It is now a symbol of what Costco stands for,” said Neil Saunders, managing director of GlobalData Retail.
‘At Costco, people feel like they’re winning’
It may seem counterintuitive, but for the Costco bean counters, the hot dog combo deal is a savvy move. You can almost see the profit margins widen as shoppers pushing carts loaded down with bulk buys descend on the food court to feast on the happy meal with the svelte price.
Business news site Morning Brew and YouTuber Phil Andrews of Maxinomics calculated that Costco members spend about $1.75 a minute when shopping in the warehouse. Market research firm Kantar estimates Costco clears $530,000 in sales a minute in the United States.
This, said Rachel Dalton, head of retailer insights at Kantar, is how the Costco sausage gets made. The hot dog deal drives loyalty – and that loyalty is measured in membership fees. Costco raked in almost $270 million in those fees last year. Kantar data shows that 95% of Costco members plan to renew their membership.
“That $1.50 combo price point is almost unbelievable,” Dalton said. It tells shoppers: “Costco hears me and listens to me.”
Newport Beach, California, filmmaker Nate Ford has been shopping at Costco since he was a toddler hitching a ride in the cart alongside the toilet paper and eggs. When he was growing up in San Diego, his dad was such a fan of the inflation-proof foot-long all-beef wiener nestled in a fluffy bun that he’d buy them for himself and his German shepherds.
The combo deal thrilled his dad so much that sometimes he’d buy 10 combo deals at a time. Ford would then have to cradle 10 cups of sloshing lemonade on the drive home.
“At Costco, people feel like they’re winning because they are getting a good deal,” he said.
Hot dog fans from Michael Penix Jr. to Julia Child
As popular with baby boomers as the TikTok generation, Costco’s combo has taken on mythic proportions.
When Michael Penix Jr. found out he got the starting quarterback job with the Atlanta Falcons, he told reporters he was in line getting a Costco hot dog.
Professional wrestler Mark Henry went viral when he famously converted to Costco hot dogs. None other than Julia Child used to hit the food court for one at the end of every Costco shopping expedition, enjoying it as much as a fine French meal, according to her biography.
Even Ryan Reynolds got into the act, appearing alongside Richard Galanti in a tongue-in-cheek campaign naming the former Costco executive as Mint Mobile’s honorary “anti-inflation officer.”
“This is a man who stared inflation in the face and said ‘Not on my hot dog,’” Reynolds deadpanned in the ad.
Some fans even have hot dog tattoos. Tom Solakov, who used to work in the Costco food court as a teenager before a career in graphic design in Toronto, had such fond memories of those days that he got the hot-dog-and-soda deal inked on his right arm.
“It’s iconic,” said A.J. Befumo, one of the “Costco guys” with his 12-year-old son, Eric (aka Big Justice).
The father-and-son duo from Boca Raton, Florida, became TikTok sensations a couple of years ago when they uploaded a video of their Costco antics − Eric dancing with Premio sausages and A.J. weight-lifting two jugs of milk.
They have racked up 2.8 million followers while rating everything from the double chocolate chunk cookie to the chicken bake – also one of the internet’s favorite hacks, a hot dog stuffed inside a chicken bake – on their “boom meter.” The hot-dog-and-soda combo deal scored a perfect five booms.
What’s more American than hot dogs? An epic deal on hot dogs, Befumo said.
“In this day and age when the prices of everything are increasing, that you can get a hot dog of that size and of that quality with a soft drink for $1.50, it’s nostalgic,” he said. “The hot dog was $1.50 20 years ago, it’s $1.50 now.”
From humble start to top dog
Costco’s inflation-proof deal got its start with a lone hot dog cart parked outside the warehouse in Portland, Oregon, in 1985.
Joe Portera, then the general manager, allowed a vendor nicknamed “Warm Wonderful Gene” to set up shop there without first getting permission from Costco corporate. The executives in the home office loved the idea, and they not only let it slide, they expanded on it, according to David and Susan Schwartz.
The husband-and-wife team chronicled the history of the Costco hot dog in “The Joy of Costco: A Treasure Hunt from A to Z.” They self-published the book in 2023 under the imprint Hot Dog Press in homage to Susan’s late father, who was partial to hot dogs and to the importance of the $1.50 hot dog deal to Costco’s success.
It was so important, in fact, that the Costco food court was originally called Cafe 150 in honor of the hot dog combo’s low, low price, they said.
From time to time, the fate of that price hung in the balance.
At a business luncheon in 2018, W. Craig Jelinek, who went on to be CEO of Costco, recalled approaching his then-boss, Costco cofounder Jim Sinegal, to suggest raising the price because “we are losing our rear ends.” “He said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’ ”
Jelinek did figure it out. In 2008, Costco switched from Hebrew National, which was raising prices, and started manufacturing its own hot dogs at a plant in California and later at another in Illinois.
“We keep it at $1.50 and make enough money to get a fair return,” Jelinek said in an interview in 2018.
‘What is Costco without its $1.50 hot dog?’
Over the years, Costco has fiddled with the drinks and condiments to maintain the price. This summer, it switched back to Coke from Pepsi in another cost-saving move.
“A lot of people think it’s a loss leader, but it’s not,” David Schwartz said.
Loss leaders are products sold below market value to get customers in the door and entice them to buy pricier items.
“They don’t make a lot of money on it,” he said, “but they do make money on it.”
If anyone would know, it’s the Schwartzes, who had rare access to the Costco honchos while writing their book. They are also the ultimate Costco hot dog fans. In fact, their first meeting with Sinegal in 2018 was over a hot dog.
They have also tasted hot dogs fresh off the assembly line in Chicago and, in their travels to 350 Costco warehouses around the globe, sampled hot dogs with fried crispy onions in Iceland and pickled jalapeno peppers in Mexico.
They still marvel at how popular Costco hot dogs are in Japan. There’s a Costco next to the ballpark where the Hiroshima Toyo Carp baseball team plays, so fans can get their hot dogs at Costco and grilled octopus balls at the game.
But can the Costco combo hold the $1.50 line forever? Count on it, the Schwartzes say.
“I don’t think it’s going to change at all,” David Schwartz said. “They will do anything they can, everything they can, to keep it at $1.50 as long as the company is around.
“It’s such an institution. What is Costco without its $1.50 hot dog?”