The Real Maker Of Costco's Famous $1.50 Food Court Hot Dogs

Despite the rising costs of food and other items due to higher inflation, not to mention tariffs impacting family budgets, Costco has a reputation for its $1.50 hot dog and drink combo — a menu item (and price) the company has kept constant since the 1980s. For context, a hot dog special that cost $1.50 in 1984 should cost $4.78 in 2025, according to the inflation calculator provided by the U.S. Bureau of Labor Statistics. Regardless, Costco has maintained its $1.50 price tag, even with the rising price of beef in 2025.

Costco sold an astonishing 124 million hot dogs in 2024 — compared to just 20 million annual hot dogs at all United States-based major league ballparks — meaning the difference in what the company could charge vs. what it does charge customers is significant. Part of why Costco is able to maintain this price tag is that it produces its own hot dogs under its Kirkland Signature label. While Costco once partnered with Hebrew National for its dogs, Costco switched away in 2008 in order to keep prices low and control any supply chain issues. Costco now makes its own hot dogs at meat-processing facilities in Tracy, California and Morris, Illinois. With that said, the low cost of this much-loved hot dog combo is part of a larger strategy to get customers inside warehouses — and willing to pay for Costco membership perks.

Much like Costco's cheap rotisserie chicken, the Costco hot dog combo acts as a loss leader. This means Costco doesn't make money on the hot dog special (or the chicken), but does gain customer loyalty and sales. Customers getting hit hard by high inflation are likely to be drawn into a warehouse location for a reliably cheap meals, and in turn are more likely to spend more money on other items.

"That $1.50 price point has been sacrosanct from the very beginning," Richard Galanti, Costco's former Chief Financial Officer, told The Wall Street Journal in 2022. Costco's co-founder, Jim Sinegal, once threatened violence over increasing the price. Per former Costco CEO Craig Jelinek, via 425 Business, he once "said, 'Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends.' And he said, 'If you raise the effing hot dog, I will kill you. Figure it out.'" Current CFO, Gary Millerchip, also eased minds in 2024 by confirming to a CNN reporter that the $1.50 combo price is "safe." While other prices at Costco might increase, chances are good the $1.50 hot dog combo is here to stay.