The Costco CEO Just Made This Bold Promise To Shoppers In A New Interview
Costco shoppers understand the benefits of buying in bulk, especially when it comes with lower prices. Many of us head to these warehouse clubs every month to stock up — and some may stop more frequently just to enjoy the famous Costco food court. No matter how often you show your membership card, you’ll probably want to be aware of a new promise that the CEO of Costco Craig Jelinek just done to buyers. Read on to find out what he said in a new interview and how it could affect your purchases in the future.
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So far this year, Costco has been making waves due to different policy changes. In April, the retailer scrapped its special COVID hours for seniors, and in May it ended its exclusive mortgage program. The price of some of Costco’s groceries has also been hit by rising inflation, although membership fees have surprisingly remained constant so far.
Costco made headlines last week, with Insider reporting that members would see higher prices for the popular bacon and cheese stuffed chicken and 20-ounce soda sold in its food court. Bake Chicken will now cost you $3.99, a 33% increase from its previous price of $2.99, and a 20-ounce soda will cost you $0.69, a 17% increase from its old price of $0.59.
These numbers may seem troubling, but members can keep some hope in the knowledge that a Costco staple is seemingly inflation-proof.
In a July 11 interview on CNBC scream in the streetJelinek was asked about the price of one of Costco’s most popular dishes, the hot dog.
When asked if Costco would raise the price of the hot dog and soda combo, the CEO simply replied, “No.” According to CNBC, the fan-favorite 20-ounce hot dog and soda combo has sold for $1.50 for the past few decades.
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Costco’s hot dog combo has been sold at its $1.50 price tag since the mid-1980s, per CNN, even with prices of other food items skyrocketing with inflation. But there may be more to the story.
Unlike other menu items, Costco has strategically kept the price of the hot dog constant, opting to sell 20-ounce fountain drinks instead of more expensive 12-ounce cans. Apparently, the desire to stay true to this price actually comes from above, like the former CEO and co-founder of Costco Jim Singal once rejected Jelinek’s appeal to raise the price of the hot dog and soda combo.
“If you raise [the price of the] hot dog, I’m going to kill you,” Sinegal told his successor, as 425Business reports. “Understand it.
Besides this conversation, Sinegal also expressed in the press his desire to keep the price at $1.50. “I know it sounds crazy to make a big fuss out of a hot dog, but you spend a lot of time on it,” Sinegal told the Seattle Times in 2009. “We’re known for this hot dog. It’s something you don’t mess with.”
Customers should appreciate the consistency, as Costco sold 122 million of these combos in 2021, per CNN.
Jelinek also talked about another cost that kept shoppers guessing: the price of membership. Currently, a basic Costco membership is $60 per year, while the executive membership is $120. The wholesaler typically increases these annual rates every 5½ years, and with the last increase occurring in June 2017, many expected to see a higher bill this summer.
But on July 11, Jelinek told CNBC that the raise, which is usually $10, is “not on the table at this time.”
“I made it very clear, I don’t think it’s the right time,” he said. “Our enrollment continues to be strong.”