Being able to get a hot dog and soda for the low price of $1.50 has become a staple for Costco Wholesale Corporation (NASDAQ:COST) stores.
Is the membership warehouse club raising the price of the combo finally?
What Happened: News circulated on Twitter Inc (NYSE:TWTR) Wednesday that the retailer was raising the price of its food court staple by $1 due to inflation.
The news is false and was the result of a parody Twitter account hoping to troll and get others to share the news, which likely had its mission accomplished.
“Breaking-Costco announces plan to raise food court hot-dog prices by $1 due to inflation,” the Twitter account @JohnWRichKid tweeted.
The fake news circulated on Twitter among many stock traders due to the impact it could have on Costco’s membership figures and stock price.
The tweet was also shared by the official Twitter account of the Republican House of Representatives.
“#Bidenflation comes for everything,” HouseGOP said in a tweet, pointing the blame of inflation on current President Joe Biden.
The account of JohnWRichKid said Tuesday that people should turn on notifications as he was ready to “F*** some s*** up.”
Later Wednesday, the account asked followers to post screenshots of funny quote tweets as he was going off the grid and praying his Twitter account didn’t get banned.
“I’m going into hiding.”
Related Link: Costco CEO Says Membership Price Hikes Likely: What Investors Should Know
Why It’s Important: Despite the rapidly rising rate of inflation, the cost of the hot dog combo is likely to remain the same at $1.50 price for the foreseeable future.
A famous story that has circulated over the years is the fact that Costco CEO W. Craig Jelinek asked Costco founder Jim Sinegal about raising prices on the combo.
“I came to (Jim Sinegal) once and I said, ‘Jim, we can’t sell this hot dog for a buck fifty. We are losing our rear ends.’ And he said, ‘if you raise the effing hot dog, I will kill you. Figure it out',” Jelinek said, as reported by 425business.
Sinegal discussed the mindset of knowing Costco was famous for the combo and the particular price.
Costco built its own hot dog manufacturing plant and created the Kirkland Signature hot dogs to help with cost controls.
“By having the discipline to say, ‘You are not going to be able to raise your price, you have to figure it out,’ we took it over and started manufacturing our hot dogs,” Sinegal said.
The hot dog combo, along with rotisserie chickens and the lower price of gas at Costco gas stations, is among the most notable features for Costco members. While Costco may lose money on each hot dog combo sold, it makes up for it by getting shoppers in the store to buy other items and getting them to buy and renew their membership each year.
The $1.50 hot dog and soda combo was launched at Costco in 1985 and isn't likely to change.
Photo: LifeisticAC via Shutterstock.com
