The world has changed so much since 1985. The price of Costco Wholesale’s hot dog-and-soda special — $1.50 — has remained constant.
That $1.50 price tag indexed for inflation would be $4.11 by now. CEO Craig Jelinek famously noticed how much the warehouse-club retailer was losing on the special, and broached the idea of hiking the price to co-founder Jim Sinegal, who threatened to kill him if he did
. As Jelinek is still alive, one can deduce the current price.
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But an internet rumor surfaced a few weeks ago indicating that even Costco was now succumbing to inflationary pressure. Costco denied it then, and, on Thursday’s night’s earnings conference call, it denied it once more.
“I want to address some incorrect information floating around on social media and a few other media outlets claiming that we have increased the price of our $1.50 hot-dog-and-soda combinations sold in our food courts,” its senior vice president for investor relations and treasury, Robert Nelson, told analysts.
“Let me just say the price, when we introduced the hot-dog-soda combo in the mid-’80s, was $1.50. The price today is $1.50, and we have no plans to increase the price at this time.”
If you like croissants, however, well, too bad.
“As you know, we’re not the first one to go up when we have higher costs. I think just recently, it may have been after the end of the quarter, reluctantly, we took up the price of our muffins and our croissants, I think, $1 as the price of a lot of those raw materials have continued to escalate to 2x and 3x and 4x what they were last year,” he said.
Costco COST, +1.24% met earnings expectations
for its third quarter but fell short of same-store-sales estimates.
Nelson did note that, historically, Costco has raised membership prices every five to six years, and the last hike was in June 2017. “Given the current macro environment, the historically high inflation and the burden it’s having on our members and all consumers in general, we think increasing our membership fee today ahead of our typical timing is not the right time,” he said.
Scot Ciccarelli, an analyst at Truist Securities, said in a research note that he expects a special dividend in the next few quarters and a membership-fee increase “eventually.”