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Costco’s combo

Costco’s legendary combo of a hot dog and soda is still selling for just $1.50.

This is legendary because the price hasn’t changed since it was introduced in 1985, despite:

  1. A seasonal inflation rate of 10% that is affecting the nation
  2. The Bureau of Labor Statistics confirming that the price should be $3.65 to account for inflation over 37 years

Costco President & CEO, W. Craig Jelinek, once claimed his attempt to raise the price was met by an even more legendary response.

“I came to [Costco co-founder Jim Sinegal] once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends.’ Sinegal’s response was, “If you raise the effing hot dog, I will kill you. Figure it out.”

A man worth over $1 billion threatened to kill another man worth over $100 million – all over the price of a $1.50 hot dog!

For Costco, the combo is not just an offering. It’s part of Costco’s identity that has faithfully drawn customers in across four decades.

In fact, so much is written and said about this legendary Costco combo, it’s hard to miss it even when we aren’t in Costco or enjoying its hallmark combo.

Takeaway

Pricing isn’t just affected linearly. It’s also affected legendarily.

Would you have changed the price of this legendary combo? Let me know here!

Your brand is what people say about you when you are not in the room.

Jeff Bezos

Kurian Babykutty

CEO, 40 Parables

Kurian's a steward of storytelling and a keen observer of people, which is why he geeks out on making marketing meaningful.

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