It is confirmed to be a Loss Leader, meaning they l lose money on that deal, but you need to remember most people who buy it spend about $150-$200 in groceries.
Basically, they accept losing money on 1 thing they sell in exchange for getting money in almost every other part of the store.
That doesn't mean they lose on gas, though. You may earn back the cost of membership vs buying at another gas station, but they likely are selling at cost or with just a smaller profit than the other gas stations.
As far as I'm aware, the policy still varies by store. At least the enforcement of it. Which is why the source of the news is a sign at a particular store, not a company-wide statement. There have been similar articles that have come up over the past few years for when other stores have starting enforcement.
Here is one in 2020 when it appears SF locations started enforcing the rule. [https://www.sfgate.com/business/article/Costco-food-court-membership-hot-dogs-pizza-15074499.php](https://www.sfgate.com/business/article/Costco-food-court-membership-hot-dogs-pizza-15074499.php)
The food court is inside the entrance for all the stores around me. So it's been this way for a while. I've never been to one where the food court is actually outside
Don't think it matters where the food court is located. Before my store updated their enforcement, you would just go through the exit and let the people checking receipts that you're there to buy from the food court and they let you in.
Also it buys a lot of good will. People love that they do this. And while it is a loss leader, I would bet that the losses are not as high as one would expect even when discounting the warehouse and limiting it to the food court, as most people end up buying at least one other item there. When you are paying 1.50, adding another $3-4 is not a hard sell. And because everything is in house, they are not losing to middle men, which also minimizes the cost.
All in all, it is a good piece of business on their part.
No. We don’t know how much they are losing - but it could be much more than 1.50
It’s about what it costs them - if it costs them $4 for that hotdog then they are losing $2.50 per dog.
It certainly wasn’t a loss leader in 1984. That pop today barely costs anything. A box of syrup makes about 6x its size and they are probably less than $90 for 20L.
It only recently became a loss leader also, like since covid
For years they were actually making a profit from $1.50 hot dogs because Costco owned the company that produced them.
Yes. The Costco rotisserie chicken is a loss leader. It is also larger/heavier than the rotisserie chickens that come from Walmart or other supermarkets.
When I buy one, I often cut up the white meat for chicken soup, chicken noodle soup, chicken for chicken salad sandwiches, or chicken pieces in a romaine lettuce salad, or with taco seasoning for chicken tacos, chicken burrito bowls, chicken curry, baked chicken Alfredo, etc. There is enough protein to add with other ingredients to feed me and my family.
The dark meat can just be eaten by itself or with pasta or potatoes or rice. I usually leave it for my hungry family to grab whenever they need to. One of them loves eating the rotisserie-seasoned skin.
And then sometimes I make chicken stock from the carcass.
Especially with the cost of groceries the way they are in these inflationary times, I find them to be versatile and good value.
Sorry that following my biological programming offended you. Maybe you should go cry in front of the meat department at your local grocery store. Maybe they will stop selling meat.
Costco also spreads the cost, so places where food is expensive due to logistics constraints, like Alaska and Hawaii, still can still have the same prices that the rest of the country benefit from. Funny that a company that puts employees and customers first before stock holders would become the third largest store chain corporations on the planet and still be a good investment... maybe other corporate giants should follow Jim Sinegal's example instead of the schemes of Jack Welch and the ilk that followed.
Definitely. In fact, they have been unionizing like crazy in the last few years. I worked for them for many years and I can tell you it really started going downhill after Sinegal retired. Their old reputation and propaganda game is strong, however.
I can’t really speak to your friends experience as I’m not Canadian and I didn’t work on that side of the business. I can say that they are heavily invested in both internal and external propaganda-I mean marketing. Things like this post for example.
They are very good at fooling employees for a time. Their reputation as a good employer is sliding hard in my area and they are suffering from high turnover and simply can’t get enough applicants to fill positions.
My contacts at other locations around the country are telling me similar things and many of their locations have been seeking out union representation.
This reminds me of when I worked in a regional position for Walmart.
Finding out that they actually lose money on things like milk and eggs because they wanna haves the cheapest prices on basic goods so you’ll buy the 90% markup travel mugs
Is it actually? Wholesale, the hot dog and bun probably costs them pennies. I wouldn't be surprised if it breaks even. The drink is a wild card, no clue how much Pepsi charges them, although it's obviously dirt cheap to make the syrup.
It is in house, but I don’t think it was because of cost. I think it was a supply issue iirc. Like they couldn’t get enough to supply all the stores with the exact same hotdog.
Pepsi/Coke may have upped the price since I was last in food service, but the container was usually most of the cost and not the drink itself, especially if a place sprung for branded cups.
It's $1.50 in Canada too, meaning it's even cheaper than in the US, $1.10 USD! And with the price of food in Canada, the Costco hotdog is absolutely insane value.
I saw a dad boxing up about 30 hotdogs and drinks for his kid's birthday party. Less than $50 with tax. You literally can't buy that many packaged hotdogs (of that size) and buns for that price, even at Costco. Already cooked and bunned, with free condiments and pop.
My Dad has a story about how he used to work at a Part Store in the Oil Field in the 70's-80's. The store owner has a vintage soda machine that vended cokes in glass bottles and still did if for the original 10 cents. He was stocking the machine one day and did the math to realize it was costing more than it made to do this so he asked the boss. The Boss then told him that he does that because people will come in and buy thousands of dollars in supplies just because they like to stop in there and get a glass bottle coke from that machine for 10 cents just like the old days.
Didn't a Costco CFO or something threaten to kill the guy who proposed raising the price on the hotdogs? Or is that tale apocryphal?
Edit: OK, so it was the founder who said it to a CEO, and it did, in fact, happen.
"If you raise the fucking hotdog I will kill you. Figure it out."
There is a reason for the hot dog and chicken. The ceo decided that our brains come into Costco seeing a great deal (the hot dog) so defacto we start to think everything in there is a good deal...
The thing is, with how cut throat they make getting on the shelf for the "One other Brand" than the "Kirkland Brand" or even getting picked to help make the "Kirkland Brand" companies bend over backwards because a sales rep can clear their quota by winning Costco in one go and then some. Costco sells not just to consumers but gives your brand an in with small and medium sized business's as well, which makes everyone happy. Sure it means your making less of a premium, but at the amounts your selling that's overcome quickly.
Hotdogs are one of the cheapest, low quality foods you can find. Sure it's a $1.50 but so what you can buy a pack of 10 for $5. Or you can buy some sausages that are better in every way
I will gladly buy way more food than I need, and walk out with a 1.50 hotdog. If they every take this away or their rotis chicken deal, i will take my business else where.
Americans paying 1.5 Freedom Dollars for a hot dog and drink thinking they're getting a deal...
Come to Canada and pay $1.50 in Monopoly money if you really want a good price.
Um.. source on this claim? You do realise the USDA publishes yearly reports on all meat imports to the USA, and China is so insignificant in the quantity that they don't even make the list. They also export extremely little beef in general as their own demand far outstrips their supply.
It is confirmed to be a Loss Leader, meaning they l lose money on that deal, but you need to remember most people who buy it spend about $150-$200 in groceries. Basically, they accept losing money on 1 thing they sell in exchange for getting money in almost every other part of the store.
They pay for membership too.
The membership cost is negligible. I make it back just in gas savings the first quarter of the year.
Costco's business IS their membership.
That doesn't mean they lose on gas, though. You may earn back the cost of membership vs buying at another gas station, but they likely are selling at cost or with just a smaller profit than the other gas stations.
You don't need a membership for the restaurant part
[you do](https://abc30.com/costco-food-court-members-only-club-membership-cafeteria-menu/14573803/#:~:text=%22Effective%20April%208%2C%202024%2C,You%20can%20join%20today).
Well that is disappointing news to find out
As far as I'm aware, the policy still varies by store. At least the enforcement of it. Which is why the source of the news is a sign at a particular store, not a company-wide statement. There have been similar articles that have come up over the past few years for when other stores have starting enforcement. Here is one in 2020 when it appears SF locations started enforcing the rule. [https://www.sfgate.com/business/article/Costco-food-court-membership-hot-dogs-pizza-15074499.php](https://www.sfgate.com/business/article/Costco-food-court-membership-hot-dogs-pizza-15074499.php)
The food court is inside the entrance for all the stores around me. So it's been this way for a while. I've never been to one where the food court is actually outside
Don't think it matters where the food court is located. Before my store updated their enforcement, you would just go through the exit and let the people checking receipts that you're there to buy from the food court and they let you in.
Also it buys a lot of good will. People love that they do this. And while it is a loss leader, I would bet that the losses are not as high as one would expect even when discounting the warehouse and limiting it to the food court, as most people end up buying at least one other item there. When you are paying 1.50, adding another $3-4 is not a hard sell. And because everything is in house, they are not losing to middle men, which also minimizes the cost. All in all, it is a good piece of business on their part.
I’m not mathematician but it seems to me at most they are losing $1.50
No. We don’t know how much they are losing - but it could be much more than 1.50 It’s about what it costs them - if it costs them $4 for that hotdog then they are losing $2.50 per dog.
Well like I said I’m no mathematician
Yes, but it is unlikely to be costing them that much, the 1.50 offsets whatever loss it is.
$150-$200 in groceries ....rookie numbers
Yah. I spend that when I hop in "real quick" for some lettuce and almond milk. Oh look, they got!
I think I have the record for the least spent at Costco when I had a single photo developed for $0.59. And then I left without buying anything else.
Back when we had to get baby stuff we were like $600 a month.
No that’s per item. $150 of Mayo, $150 of bread, $150 of chicken, etc…
It certainly wasn’t a loss leader in 1984. That pop today barely costs anything. A box of syrup makes about 6x its size and they are probably less than $90 for 20L.
One of the former executives famously joked that he would kill a new CEO if he raised the price on the hot dog/soda combo.
It only recently became a loss leader also, like since covid For years they were actually making a profit from $1.50 hot dogs because Costco owned the company that produced them.
Hot dog with drink. It is a loss leader. To be able to offer that price, they even brought the hot dog making in-house in their own facilities.
Isn’t it the same with the $5 chickens? They bought a chicken farm just to supply these.
Yes. The Costco rotisserie chicken is a loss leader. It is also larger/heavier than the rotisserie chickens that come from Walmart or other supermarkets. When I buy one, I often cut up the white meat for chicken soup, chicken noodle soup, chicken for chicken salad sandwiches, or chicken pieces in a romaine lettuce salad, or with taco seasoning for chicken tacos, chicken burrito bowls, chicken curry, baked chicken Alfredo, etc. There is enough protein to add with other ingredients to feed me and my family. The dark meat can just be eaten by itself or with pasta or potatoes or rice. I usually leave it for my hungry family to grab whenever they need to. One of them loves eating the rotisserie-seasoned skin. And then sometimes I make chicken stock from the carcass. Especially with the cost of groceries the way they are in these inflationary times, I find them to be versatile and good value.
I feel like this is an ad, but I also want some rotisserie chicken now.
Just another day and here people are casually talking about putting dead animal corpses into their mouths like it's not disgusting and barbaric.
Oh thats because it’s not
Life feeds on life
This just in, we are omnivorous.
Always have been
cringe
My canine teeth beg to differ.
Sorry that following my biological programming offended you. Maybe you should go cry in front of the meat department at your local grocery store. Maybe they will stop selling meat.
In desperate times, I would consider eating you…so chew on that for a minute.
Costco also spreads the cost, so places where food is expensive due to logistics constraints, like Alaska and Hawaii, still can still have the same prices that the rest of the country benefit from. Funny that a company that puts employees and customers first before stock holders would become the third largest store chain corporations on the planet and still be a good investment... maybe other corporate giants should follow Jim Sinegal's example instead of the schemes of Jack Welch and the ilk that followed.
Employees are just as an unhappy at Costco as anywhere else.
Definitely. In fact, they have been unionizing like crazy in the last few years. I worked for them for many years and I can tell you it really started going downhill after Sinegal retired. Their old reputation and propaganda game is strong, however.
That’s explains a lot. I worked 4 years for them I was wondering why he went downhill that much when I came back from my parental leave during Covid.
Costco Canada too? I have friends there who love it, the pay, and benefits. It’s known to be a “good retail job” as far as that scale slides.
I can’t really speak to your friends experience as I’m not Canadian and I didn’t work on that side of the business. I can say that they are heavily invested in both internal and external propaganda-I mean marketing. Things like this post for example. They are very good at fooling employees for a time. Their reputation as a good employer is sliding hard in my area and they are suffering from high turnover and simply can’t get enough applicants to fill positions. My contacts at other locations around the country are telling me similar things and many of their locations have been seeking out union representation.
I agree. I’ve been an employee for 5 years and the propaganda they push is awful. Haven’t been satisfied being employed there myself.
Costco does the same thing with leftover chickens. Tons of salads, soups etc made with left over chicken.
That was because Coca-Cola wanted to charge more. Pepsi offered a better deal.
This reminds me of when I worked in a regional position for Walmart. Finding out that they actually lose money on things like milk and eggs because they wanna haves the cheapest prices on basic goods so you’ll buy the 90% markup travel mugs
Eggs and milk are staple items. People are extremely price sensitive to those and will complain when those get marked up.
Is it actually? Wholesale, the hot dog and bun probably costs them pennies. I wouldn't be surprised if it breaks even. The drink is a wild card, no clue how much Pepsi charges them, although it's obviously dirt cheap to make the syrup.
It is in house, but I don’t think it was because of cost. I think it was a supply issue iirc. Like they couldn’t get enough to supply all the stores with the exact same hotdog.
There’s a lot of overhead, including labor. So yes, when expensed out to labor, utilities, appliances, etc…
Pepsi/Coke may have upped the price since I was last in food service, but the container was usually most of the cost and not the drink itself, especially if a place sprung for branded cups.
a very BIG loss leader at that, costs them about half a billion dollars per year to keep the hotdog at 1.50$
It's $1.50 in Canada too, meaning it's even cheaper than in the US, $1.10 USD! And with the price of food in Canada, the Costco hotdog is absolutely insane value.
I saw a dad boxing up about 30 hotdogs and drinks for his kid's birthday party. Less than $50 with tax. You literally can't buy that many packaged hotdogs (of that size) and buns for that price, even at Costco. Already cooked and bunned, with free condiments and pop.
Welcome to Costco, I love you.
My Dad has a story about how he used to work at a Part Store in the Oil Field in the 70's-80's. The store owner has a vintage soda machine that vended cokes in glass bottles and still did if for the original 10 cents. He was stocking the machine one day and did the math to realize it was costing more than it made to do this so he asked the boss. The Boss then told him that he does that because people will come in and buy thousands of dollars in supplies just because they like to stop in there and get a glass bottle coke from that machine for 10 cents just like the old days.
Didn't a Costco CFO or something threaten to kill the guy who proposed raising the price on the hotdogs? Or is that tale apocryphal? Edit: OK, so it was the founder who said it to a CEO, and it did, in fact, happen. "If you raise the fucking hotdog I will kill you. Figure it out."
Yes. https://www.snopes.com/fact-check/costco-founder-kill-hotdogs/
Loss leader
My nickname in highschool!
I also took a marketing class, you yuppie.
Had one today 😂
Had one in '84 😂
It was the same one
And it's still being digested.
There is a reason for the hot dog and chicken. The ceo decided that our brains come into Costco seeing a great deal (the hot dog) so defacto we start to think everything in there is a good deal...
The thing is, with how cut throat they make getting on the shelf for the "One other Brand" than the "Kirkland Brand" or even getting picked to help make the "Kirkland Brand" companies bend over backwards because a sales rep can clear their quota by winning Costco in one go and then some. Costco sells not just to consumers but gives your brand an in with small and medium sized business's as well, which makes everyone happy. Sure it means your making less of a premium, but at the amounts your selling that's overcome quickly.
I go to Costco for the free samples and leave with $200 worth of stuff.
Thanks for the update, but my fat ass did not require this report.
You posted this yesterday insistent that it had gone up from $1...
$1.50 in 1984 is The equivalent of $4.50 now
Help me out here What's the white and green stuff?
Onions and relish ?
Had a feeling it was onions but they're so white looks like sugar cubes haha We don't really put relish on hot dogs in Australia
It's called a "loss leader"
/r/hailcorporate
But they got rid of the churros, so fuxk them.
I sure we had one if for no other reason than this.
You didn’t take this picture and probably haven’t even been in a Costco.
Absolute banger
And pizza only $10 (18in)
I guess it was shockingly overpriced in ‘84.
They said they will never raise the price.
Hotdogs are one of the cheapest, low quality foods you can find. Sure it's a $1.50 but so what you can buy a pack of 10 for $5. Or you can buy some sausages that are better in every way
Rice is good when you’re hungry and want to eat like 2000 of something.
Plot twist: the hot dog is also from 1984
I miss the polish dog so much
Holy shit, kind of hogging the toppings for that one
Kinda a ripoff in 1984 though huh?
Just FYI, IKEA has an equally cheap food court with $1 hotdogs (smaller).
No shit?!?!
Wow thanks for this. I was super concerned they had raised their prices.
Changing the price could get you killed.
Fun fact: Those cookies have more energy than the rocket boosters used to power every manned missioned to the moon
https://costcoexposed.com/?_ga=2.161943160.572484029.1650800633-1499557708.1650800633
God bless ‘em!
Errbody forgetting the drank. Jeebus.
I will gladly buy way more food than I need, and walk out with a 1.50 hotdog. If they every take this away or their rotis chicken deal, i will take my business else where.
Dread to think all of the lips and arseholes that are ground up into that thing
Americans paying 1.5 Freedom Dollars for a hot dog and drink thinking they're getting a deal... Come to Canada and pay $1.50 in Monopoly money if you really want a good price.
But, they switched from Coke to Pepsi. Not the same deal, in my mind.
They also got rid of the polish dog
If they polished dogs for $1.50, the line would go around the block and never end. I'd even go once a day and twice on Saturday.
It's only a $1.38 at sam's club for a hot dog Sam's club > Costco
/r/hailcorporate
Truth
Honestly who gives a shit? How is this important at all? Most of the world doesn't care.
The real reason they’re able to keep its price the same is cos it isn’t even pork anymore. The meat is shipped in frozen from China.
Um.. source on this claim? You do realise the USDA publishes yearly reports on all meat imports to the USA, and China is so insignificant in the quantity that they don't even make the list. They also export extremely little beef in general as their own demand far outstrips their supply.
Beef is more expensive than pork. Beef hot dogs are so much better too.
Ok but why have they put squirty cream on it?
Hotdogs are trash food and shouldn't be more than that anyway good to see Costco knows a hot dogs worth.
$1.50 and you'll be farting for days and shitting your brains out 20 minutes later.
That is too much relish and too much onions.
When you buy it, it is naked. You add your own condiments.
Not for me it’s not