Costco has made its $1.50 hot dog and soda combo a sort of touchpoint that defines the brand’s overall strategy. It’s not just a meal; it’s a salty, calorie-laden commitment to low prices.
The chain launched the deal in 1984 and has not changed its price since then.
The affordable combo has become the stuff of legend, dating back to a 2015 exchange between founder Jim Sinegal and then-CEO Craig Jelinek.
“Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends,” Jelinek said to Sinegal.
The founder’s response has become almost as famous as the the $1.50 hot dog deal it defended.
“If you raise the effing hot dog, I will kill you. Figure it out,” Sinegal said.
That’s one of those corporate stories that seems made up, but Snopes actually verified it as truthful.
Now, Costco has made a change to the $1.50 hot and soda meal deal. Although it’s one that many members will like, it will not be without controversy.
The $1.50 hot dog deal changed last summer
Costco has added the option of substituting a bottle of water for soda as part of the $1.50 meal deal. That should appeal to members who want to skip the soda, but still get the combo price, although the chain should expect some blowback over its use of plastic bottles.
That’s something Costco has tried to get in front of by addressing the issue on its sustainability web page.
The chain has made changes to the plastic it uses, including in its water bottles.
“Switching to lighter-weight packaging and using more recyclable content helps us save millions of pounds of plastic per year,” Costco shared.
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Some members expressed concern on social media about the water bottle change.
The change was discussed on Reddit, where users raised concerns about the packaging.
“The plastic in the Kirkland bottled water is so thin and flimsy that if you drop them accidentally, they bust open,” one Reddit poster wrote.
That comment was echoed by hundreds of other comments, and having purchased Costco’s Kirkland water bottles, it’s a valid comment, although one that’s not likely to impact your ability to drink from the water bottle.
Related: History of Costco: Company timeline and facts
Costco has changed the hot dog deal before
In 2015, after the famed conversation between Sinegal and Jelinek, Costco saved money by switching from Coca-Cola products to PepsiCo brands. Then, in the summer of 2025, Costco switched back to Coke products, which impacted the famous $1.50 hot dog deal by changing the soda choices that came with it.
“This summer we will be converting our food-court fountain business back over to Coca-Cola,” CEO Ron Vachris shared during Costco’s 2024 investors’ meeting.
That move likely made some customers happy and others angry, as both brands have dedicated followings around the world.
“Coca-Cola beats Pepsi as the most consumed soft drink in the United States, but data from Statista Consumer Insights also shows that Coke does not have the same market leadership in the U.S. as in other countries. While 60% of U.S. respondents said they had consumed Coca-Cola in the past 12 months, this number was as high as 72% in the United Kingdom and 83% in Mexico,” according to Statista.
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Costco’s $1.50 hot dog deal is a symbol
The $1.50 hot dog combo, which includes an all-beef hot dog and a 20-ounce soda or a bottle of water, has become a key part of Costco’s marketing.
“Costco is all about selling its membership. And they make such a ton on the membership, they just need to enhance and keep that good feeling. So, when you have these incentives such as the hot dogs, you’re just motivating people to feel part of this community and continue shopping,” TheStreet retail advisor and RTMNexus CEO Dominick Miserandino shared with TheStreet.
GlobalData Managing Director Neil Saunders explained in a LinkedIn post Costco’s logic behind the hot dog deal, and what it’s giving up in revenue to keep the $1.50 price.
“Last year, Costco raked in $367.5 million in revenue from its hotdog sales. If it had increased prices in line with inflation, it could have made $1,107 million. In other words, it lost out on $740 million in revenue,” he wrote.
That, however, is not the warehouse club‘s business model.
“This is a classic case of knowing the price of everything and the value of nothing,” he added. “The hot dog isn’t there to drive profit. It is a sort of promise that Costco will always be a good value for its customers. It is a symbol of what Costco stands for.”
Costco has made behind-the-scenes changes
Costco has said the $1.50 hot dog and soda combo is not intended as a profit driver, but the chain has taken steps to control its costs.
“We’ve gotten into vertical integration and sourcing as the need arises. And if you think back in the infamous story about the hot dog and Coke at $1.50 and, how are you going to figure out how to keep that price there? Well, we’re going to open our own meat plants,” CEO Ron Vachris said during the chain’s third-quarter 2024 earnings call.
During that same call, the first for new CFO Gary Millerchip, who took over for long-time CFO Ron Galanti, the new financial leader made one thing clear.
“Oh, and to clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” he said during his opening remarks.
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