Costco's CEO Just Gave Shoppers A New Reason To Keep Their Membership

Although you may focus on how much you can save on groceries at Costco when you decide to purchase a membership, plenty of other perks are also available. For starters, you have a 100% satisfaction guarantee on your purchases as well as access to travel and service deals. However, for some people, it's the food court that draws them in to the membership warehouse. Costco's food court offerings include sandwiches, pizza slices, dessert items, and even a chicken Caesar salad. However, the hot dog and soda combo is easily the signature food court item that generates the most buzz. In fact, some estimates say that Costco sold a whopping 245 million food court hot dogs  in fiscal year 2025. 

While fans love the taste of the hot dog, the fact that the combo's price has remained $1.50 since 1985 is likely another reason why it's so popular. And there is good news on that front. In a recent Costco Instagram post, the company's current CEO, Ron Vachris, promised that the iconic hot dog and soda combo would remain at $1.50 for the foreseeable future. "The hot dog price will not change as long as I'm around," Vachris proclaimed in the video.

Costco's founders Jeffrey Brotman and Jim Sinegal pledged to never raise the price of the combo, and subsequent Costco leadership has maintained that pledge over four decades. That hasn't always been easy, especially when the combo's inflation-adjusted price should be around $4.65 in 2026.

Although Costco doesn't reveal how much its hot dog and soda combo costs to produce, it's assumed that the product is a loss leader for the retailer. A loss leader being a product that a company sells at a loss in order to bring in customers. However, David Schwartz, who co-wrote a book about Costco in 2023, told USA Today, "A lot of people think it's a loss leader, but it's not."

One major cost-saving step for the retailer was when Costco changed the manufacturer of its hot dog combo in 2009 from Hebrew National to Costco's own Kirkland Signature brand. Costco now operates two Kirkland Signature meat-processing plants, which allows it to create and package its own in-house hot dogs.

It's also worth mentioning that other Costco products help the company maintain profits. For instance, Costco often has a higher margins on items such as jewelry, high-end clothing, vitamins, furniture, and mattresses. Generating these higher profits on certain items allows Costco to maintain its lower hot dog combo price. Plus, keeping the hot dog combo at $1.50 creates a sense of trust among Costco customers that can be worth a lot more than the cost of a hot dog. If the inflation-proof hot dog combo convinces customers to renew their memberships each year, it's a serious benefit to Costco, which collected $5.3 billion in membership fees in fiscal year 2025, according to its Fiscal year 2025 operating report.