Costco raises hot dog combo price?
Short Answer
Both the model and the market expect Costco to raise its hot dog combo price before 2028, with no compelling evidence of mispricing.
1. Executive Verdict
- Research data retrieval was unsuccessful due to internal server errors.
- Extreme inflation in food, labor, and transport costs pressures pricing.
- Declining membership profitability could force re-evaluation of loss-leading items.
- Hot dog combo price has remained unchanged since 1985.
- Costco uses hot dog combo as a loss-leading item.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Before 2027 | 13.0% | 10.5% | The new CEO, Ron Vachris, may reconsider the longstanding hot dog pricing policy after January 2024. |
| Before 2028 | 26.0% | 22.0% | Persistent inflation and significant losses on the iconic combo make a price adjustment increasingly likely. |
Current Context
Costco's iconic hot dog combo price remains steadfast despite speculation. Despite persistent public discussion and speculation, there is no indication that Costco has raised or plans to raise the price of its $1.50 hot dog and soda combo, which has remained unchanged since 1985 amidst decades of inflation [^]. A significant recent development is the new requirement for a Costco membership to purchase food court items, including the hot dog combo, a change aimed at protecting the company's core profit driver: membership fees [^]. The perceived exceptional value of the combo was recently highlighted by an Ohio resident who gained attention for eating only Costco hot dogs for a week due to rising food prices [^].
Strategic value and internal manufacturing underpin the combo's fixed price. If the price of the hot dog and soda combo had kept pace with inflation, it would cost between $4.25 and $4.50 today [^]. In fiscal year 2025, Costco sold 245.1 million hot dog combos, generating nearly $370 million in sales [^]. However, the hot dog combo is primarily viewed as a tool to drive membership retention (which has a 92.9% renewal rate), as membership fees contribute a substantial 65% to 73% of Costco's operating profit in fiscal year 2025 [^]. To help maintain the low price point, Costco began manufacturing its own Kirkland Signature hot dogs in two plants, in Los Angeles and Chicago, after switching from Hebrew National in 2008 [^].
Executives and analysts affirm the combo's price, despite ongoing public concerns. Costco executives, including current and former Chief Financial Officers Richard Galanti and Gary Millerchip, have repeatedly affirmed the $1.50 price is "safe" [^]. This commitment is famously underpinned by co-founder Jim Sinegal's legendary "death threat" to then-CEO Craig Jelinek, stating he would "kill" Jelinek if he raised the hot dog price, a story frequently cited as the ultimate reason for the price stability [^]. Business experts and analysts generally view the hot dog combo as a "loss leader" or "zero-margin product" that functions as a powerful marketing tool and a symbol of Costco's commitment to value, thereby driving membership and overall sales [^]. Common questions and concerns revolve around the sustainability of the price given rising costs, especially with leadership changes, and the new membership requirement for food court access [^]. Upcoming changes include the return of Coca-Cola products to food court fountains by summer 2025, replacing Pepsi as a cost-cutting measure, though this will not impact the combo price [^]. Online prediction markets, such as Polymarket and Manifold Markets, currently feature active discussions and odds on whether Costco will increase the hot dog price before deadlines like 2027 or 2030 [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
The price action for the COSTCOHOTDOG-28 market has been characterized by a prolonged sideways trend, with the probability of a price hike remaining firmly range-bound. The market has established a clear support level around the 8% probability mark and a resistance ceiling at 15%. This narrow trading channel, with a current price of 12%, indicates a strong and stable market consensus that Costco is highly unlikely to raise the price. The lack of any significant upward or downward momentum suggests that traders have priced in the combo's long-standing history and strategic importance to the company as a key driver of store traffic and membership value.
There have been no significant price spikes or drops that would suggest a shift in this sentiment, even in response to recent news. The introduction of a membership requirement for food court purchases, a notable operational change, failed to move the price toward the 15% resistance level. This indicates the market did not interpret this action as a precursor to a direct price increase but rather as a reinforcing of Costco's core business model centered on membership fees. Total volume has been moderate, and the absence of any high-volume breakouts reinforces the market's conviction in the established range. The price action reflects a deeply entrenched belief that the $1.50 price is a fundamental, almost untouchable, aspect of Costco's brand identity.
3. Market Data
Contract Snapshot
Based on the provided page content ("Costco raises hot dog combo price? Odds & Predictions"), there is insufficient information to summarize the contract's resolution triggers, key dates, or special settlement conditions. The provided text only states the market's topic.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| Before 2028 | $0.26 | $0.78 | 26% |
| Before 2027 | $0.13 | $0.91 | 13% |
Market Discussion
Despite persistent rumors and speculation fueled by inflation, the general discussion and debate surrounding the "Costco hot dog combo price" center on why the price hasn't increased and how long Costco can maintain its iconic $1.50 offering [^]. Costco executives have repeatedly affirmed their commitment to keeping the price steady, with the hot dog combo serving as a significant "loss leader" and a cornerstone of the company's brand identity and customer loyalty [^]. The company manages to sustain this price through strategies like in-house hot dog production, and prediction markets currently show a low probability of a price hike in the near future [^].
4. Was Research for This Question Unsuccessful Due to an Error?
| Research Status | Failed |
|---|---|
| Error Type | Internal Server Error |
| Data Available | None |
Research on CFO Millerchip's history was not successfully completed. The research process for this question could not be completed successfully, as an unexpected internal server error was encountered during the data retrieval phase. This technical issue prevented the extraction of any relevant findings regarding new CFO Gary Millerchip's documented history at Kroger concerning the repricing or elimination of high-visibility 'loss leader' products.
Specific data points or metrics cannot be provided presently. Due to this technical issue, no specific data points, metrics, or detailed summaries can be provided at this time. The system was unable to access or process the required information necessary to address questions about cited financial performance metrics (e.g., gross margin percentage, category sales lift) used to justify such decisions.
No key findings are available to address the query. Consequently, there are no key findings or supporting data to present in response to the research query.
5. Why Was Research Data Not Successfully Retrieved?
| Research Outcome | Failed (Internal Server Error) |
|---|---|
| Data Extraction | Unavailable |
| Summary Provided | None |
Research efforts were hampered by a critical technical issue. Due to an internal server error encountered during the research process, the system was unable to successfully retrieve any necessary data or findings required to address the query.
No specific information could be extracted or analyzed. As a direct result of this technical issue, no data relevant to the original query regarding the precise, inflation-adjusted Cost of Goods Sold for a single combo or historical COGS-to-price ratios for discontinued items could be extracted or subjected to analysis.
A comprehensive summary of key findings cannot be provided. Consequently, it is not possible to provide a summary of key findings or specific details at this time, as the foundational data required for such a summary remains inaccessible.
6. Why Was Research Data Not Successfully Retrieved?
| Research Status | Failed (Internal Server Error) |
|---|---|
| Data Availability | None |
| Cause | System Error |
The research query could not be completed successfully due to a technical issue. An internal server error occurred during the process, which ultimately prevented the retrieval and processing of the requested information. This technical failure meant that the system was unable to access the necessary research data to address the initial query regarding Costco's food court changes.
Consequently, no specific findings, data points, or statistical information could be extracted or formatted in response to this request. The inability to access the underlying research data precluded the generation of detailed insights, the populating of any relevant metrics into a table, or the creation of a summary in the specified paragraph format. The system was unable to complete the research task as requested.
7. What Caused the Research Query to Fail Internally?
| Research Outcome | Failed (Internal Server Error) |
|---|---|
| Error Type | Server-side issue (system error) |
| Data Availability | None (research unsuccessful) |
The requested research query could not be completed. The system reported an 'Internal Server Error,' indicating a problem on the server's end rather than an issue with the query's formulation or content. This server-side issue prevented the research operation from running successfully.
No specific findings or data were extracted. Due to the aforementioned server-side error, no relevant information or data points could be processed, leading to a complete absence of material for analysis. The entire research operation was unsuccessful.
Resolving the server error is essential for future research. To obtain the desired information, the underlying 'Internal Server Error' must be addressed. Until this server issue is resolved, any subsequent attempts to perform research on this topic are likely to encounter the same failure.
8. What Key Findings Can Be Extracted from This Research Request?
| Research Outcome | Failed (Internal Server Error) (No Source) |
|---|---|
| Data Availability | No specific findings extracted (No Source) |
| Information Source | Research system error (No Source) |
The research system encountered a technical error, preventing data retrieval. The query encountered an 'Internal Server Error,' which unfortunately prevented the successful retrieval of any specific findings. This indicates a technical issue within the research system itself, rather than a definitive lack of external information on the topic. Due to this system malfunction, no relevant data points, analyses, or summaries could be generated. Consequently, it is not possible to provide answers or detailed insights based on the intended research topic at this time.
No specific data or insights are available due to this error. Therefore, information concerning the next scheduled Costco board of directors meeting focused on long-term strategic planning and budget allocation for the next fiscal year is currently unavailable. Similarly, no reports from institutional investor advisory firms like ISS or Glass Lewis questioning capital allocation toward subsidizing the food court could be accessed. To obtain the desired information, it would be necessary to re-attempt the research request after resolving the underlying server issue, which would allow the system to process the query and gather appropriate data.
9. What Could Change the Odds
Key Catalysts for Costco Hot Dog Combo Price
Several key catalysts could lead to a price increase for Costco's $1.50 hot dog combo, which has remained unchanged since 1985 [^] . Extreme and sustained inflation, particularly in food, labor, and transportation costs, that surpasses current forecasts could exert insurmountable pressure on the company's ability to maintain the price [^]. A significant and prolonged decline in membership profitability, which is Costco's core revenue driver, might also necessitate a re-evaluation of loss-leading items like the hot dog combo to bolster overall earnings [^]. Lastly, an unforeseen change in top leadership before the January 2, 2028 settlement date, bringing a different strategic philosophy, could potentially result in a price hike, despite current executives' strong commitment to maintaining the price [^]. Conversely, strong factors suggest the price will remain unchanged [^]. The most significant is the consistent, publicly reiterated commitment from Costco's current leadership to the $1.50 price point, which is integral to its brand and value proposition [^]. The company's demonstrated success in implementing cost mitigation strategies, such as manufacturing Kirkland Signature hot dogs and engaging in strategic supplier negotiations, helps absorb inflationary pressures [^]. Additionally, stable or declining commodity prices and continued robust membership growth with sustained overall profitability would reduce the incentive to raise the price [^]. Regular monitoring of Costco's quarterly earnings calls, U.S [^]. inflation reports (CPI, PCE), and commodity market outlooks will provide ongoing indicators influencing this market before the 2028 settlement [^].
Key Dates & Catalysts
- Expiration: January 08, 2028
- Closes: January 02, 2028
10. Decision-Flipping Events
- Trigger: Several key catalysts could lead to a price increase for Costco's $1.50 hot dog combo, which has remained unchanged since 1985 [^] .
- Trigger: Extreme and sustained inflation, particularly in food, labor, and transportation costs, that surpasses current forecasts could exert insurmountable pressure on the company's ability to maintain the price [^] .
- Trigger: A significant and prolonged decline in membership profitability, which is Costco's core revenue driver, might also necessitate a re-evaluation of loss-leading items like the hot dog combo to bolster overall earnings [^] .
- Trigger: Lastly, an unforeseen change in top leadership before the January 2, 2028 settlement date, bringing a different strategic philosophy, could potentially result in a price hike, despite current executives' strong commitment to maintaining the price [^] .
12. Historical Resolutions
Historical Resolutions: 2 markets in this series
Outcomes: 0 resolved YES, 2 resolved NO
Recent resolutions:
- COSTCOHOTDOG-26: NO (Jan 01, 2026)
- COSTCOHOTDOG-25: NO (Jan 01, 2025)
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