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If you've ever walked into a Costco and grabbed one of their famous hot dog and soda combos, you know how satisfying it feels to get a hearty snack without breaking the bank. The price? A jaw-dropping $1.50. Yes, since 1985, Costco has kept this combo at the same price, even as everything else around us seems to cost twice or even three times as much. 

While groceries, gas, and rent have skyrocketed, this beloved food court staple has remained frozen in time. So how on earth has Costco managed to keep this deal so affordable for decades? Let's take a closer look.

A Promise Costco Keeps Seriously

Costco’s commitment to the $1.50 hot dog combo is legendary inside and outside the company. It actually started as a promise by one of Costco’s co-founders, Jim Sinegal, who famously told the CEO at the time something along the lines of, “If you raise the price of the hot dog, I will kill you.” Of course, he didn’t mean it literally, but you get the message—Costco was determined to hold the line on that price no matter what.

This promise shaped how Costco runs its food court. The company takes a long-term view, accepting thinner profit margins on this combo as a way to build customer loyalty and trust. To them, keeping that price steady is part of the brand experience—you come for affordable bulk shopping and stay for the unbeatable food court prices.

How Do They Do It?

Costco’s strategy relies on a few key moves. It maintains the $1.50 hot dog combo by producing its own Kirkland Signature hot dogs since 2009, cutting reliance on outside suppliers. This vertical integration gives them tighter control over costs and quality.

Moreover, they buy ingredients in massive quantities, which gives them serious bargaining power with suppliers. This means lower costs for beef, buns, and soda syrup compared to smaller competitors.

They focus on efficiency. The food courts operate with streamlined menus, simple prep work, and quick service. This keeps labor costs low and allows them to serve millions of hot dogs without ballooning expenses.

They also don’t throw in fancy extras or unlimited toppings that add cost. It’s a no-frills, straightforward combo that stays affordable because it doesn’t try to be anything else.

What This Means For You

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For shoppers, this deal is pretty much unbeatable. While gas prices, groceries, and just about everything else creep up, that $1.50 hot dog combo remains a small comfort for families and individuals alike.

Though rumors occasionally swirl about price hikes or changes to the combo, Costco has continually reassured customers that the price is safe. So, the next time you snag that hot dog and soda at the food court, consider the decades of careful planning and commitment behind keeping it affordable.