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Costco says its hot dog-soft drink combo will still be $1.50 despite claims it was going up

By Matt Collins Article may include affiliate links

Claims that Costco is planning to increase the price of its famous $1.50 hot dog and soft drink combo by $1 due to inflation that was spread by at least some Republican-leaning Twitter accounts are not true.

The claim began circulating in May and has stuck around.

However, the company addressed the issue on a May 26, 2022 earnings call. The company said that is “incorrect information” and has no immediate plans to raise the price.

Costco has offered the combo, which includes a quarter-pound, all-beef hot dog plus 20 oz. fountain drink for $1.50 since the 1980s. The combo also includes toppings such as onions, relish, ketchup and mustard as well as one refill on the beverage (though the soda fountains at Costco’s food court are not monitored).

The combo has had two significant changes in its history, though they were relatively minor. In 2008, the warehouse store’s food court moved away from using Hebrew National branded products to its own house brand, Kirkland. This also meant the product was no longer certified Kosher. In 2013 Costco switched from Coca-Cola fountain products to Pepsi in a move that it said was to help keep the cost the same.

There has been widespread speculation if the hot dog combo is what’s known as a “loss leader” for Costco’s food court — an item that the company actually loses money selling but is offset, at least to some degree, by the sales of higher-margin items, such as chicken bakes, that the counter also sells at comparatively higher prices.

Costco has never specified exactly how much it makes from the food court or its hot dog combo. There have been reports from people claiming to be former buyers for the company that said prepared food is a huge money-make for Costco, while others appear to validate the notion that the hot dog combo is a loss leader.

For some time, Costco did not require customers to have a membership to buy from the food court, so even non-members could often enter the store and pay the same price as members. That changed in 2020, when the company officially started requiring a membership to buy from the food court.

There still, however, is the popular workaround of having a Costco member buy a gift card to the store on your behalf, which unlocks the ability to shop at the store without a membership.