Costco bargain that will not go up with inflation – & why store keeps prices low

COSTCO has stood firm on the pricing of one of its most beloved items despite inflation.

One classic combo has shown itself to be a huge part of Costco’s customer-focused culture.

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For almost 40 years, Costco has charged $1.50 for its hot dog and soda combo meal.

While inflation has reached record highs, the company reportedly refuses to raise the price on its classic.

John Longo, a professor at Rutgers Business School, suggested that Costco does not make a profit on such a low-cost deal.

Instead, it is something that helps incentivize customers to get in the warehouse and spend money on other things, Business Insider reported.

Longo asked: “How many people simply buy the hot dog combo and leave?

“Perhaps some, but not most, shoppers.”

Longo noted that because Costco makes most of its money from membership fees, it is the comfort and consistency of the deal that makes customers feel cared about.

“They are telling their customers that they know times are tough due to high inflation, and that they are not taking advantage of them while they are down,” he said.

Tren Griffin is author of the book Charlie Munger: The Complete Investor, whose titular businessman served as the director of Costco since 1997.

Griffin suggests that Costco is the ultimate in balancing quality and price.

“Costco does the comparison shopping for high quality products for its customers, including for a tasty hot dog,” he said.

Another finance pro said this move is one that perfectly defines Costco’s customer-first mentality.

“The $1.50 hot dog is a product of Costco’s customer-centric culture,” Darren Pollock, president of the Costco share-owning Cheviot Value Management said.

“It’s a symbol that the company need not make money on every item that it sells.

“How many other retailers are known for that?”

He continued: “Charlie Munger loves the Costco culture for treating its customers well by providing them with the lowest possible prices for the goods it sells.”

While the financial future of many big brands is uncertain as inflation trends, Costco looks to be putting its big-box members first, at least in the interim.