In 1985, Costco introduced a hot dog and soda combo in its food courts for $1.50. Forty years later, it still costs $1.50.
That’s not an accident. It’s a deliberate, fiercely protected policy that has become one of the most famous pricing decisions in American retail history, and it almost didn’t survive a conversation between two executives.
At some point in the mid-2000s, Costco’s then-president and CFO Richard Chang went to co-founder and CEO Jim Sinegal with a problem. The hot dog combo was losing money. Beef prices had risen, costs had gone up, and the $1.50 price point that had seemed reasonable in 1985 was increasingly difficult to sustain. Chang suggested raising the price.
Sinegal’s response: “If you raise the price of the f—ing hot dog, I will kill you,” he told Chang. “Figure it out.”
Chang figured it out. Costco eventually brought hot dog production in-house by building its own manufacturing facilities, cutting out suppliers and dramatically reducing costs. The move saved the company enough money to keep the price exactly where it had always been.
Sinegal’s reasoning was never just about hot dogs. He believed the $1.50 combo was a symbol of Costco’s relationship with its members, a tangible, unchanged promise that the company was on their side. Raising it, even slightly, would signal something had changed. He wasn’t willing to let that happen.
He stepped down as CEO in 2012. His successor has held the line. Costco’s current CEO Ron Vachris reaffirmed as recently as 2024 that the price will not change.
Inflation has risen over 200% since 1985. The hot dog is still $1.50.
Why Costco’s Famous $1.50 Hot Dog Hasn’t Changed Price in 40 Years
