At some point, you have to wonder what’s actually in the $1.50 Costco hot dog + drink combo to be able to offer it at that same price since 1984. (Costco sells more hot dogs annually than every MLB stadium combined.)
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Discussion 5 comments
There are certain things you should NOT ever, under any circumstances, wonder about.
I mean, a cup's worth of soda syrup costs basically nothing. And an 8-pack of Nathan's hot dogs is $6.50. So, they make 50 cents or so.
It's a loss leader. It gets people to spend more time in Costco and talk about spending time in Costco. We're doing it right now!
Not necessarily. They're probably operating break even or even at a slight loss but an average Costco shopper spends something like $150 per trip. Anything that gets you into the store marginally more often is pretty valuable!
Based on a quick look at retail prices, a big hot dog + bun is 60 cents. That's Oscar Meyer at Target. And the drink is similarly cheap. Once you add the staff and equipment, they are losing money, but not that much at their scale. (The staff don't just serve hot dogs.) It's absolutely a loss leader, but so are their famously large free samples—and probably not that much different when you add it all up.
The notable point here is that hot dogs are a shockingly cheap source of protein no matter how you figure it.
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