Costco's CEO Just Made This Bold Promise to Shoppers in New Interview
If you shop at Costco, you'll want to hear what he had to say.
Costco shoppers understand the benefits of buying in bulk, especially when it comes in tandem with lower prices. Many of us head to these warehouse clubs monthly to stock up—and some may stop in more frequently just to take advantage of the famed Costco Food Court. Regardless of how often you're flashing your membership card, you'll likely want to be aware of a new promise that Costco CEO Craig Jelinek just made to shoppers. Read on to find out what he said in a new interview, and how it could affect your shopping trips in the future.
Costco shoppers have adjusted to changes in 2022.
So far this year, Costco has made waves due to different policy changes. In April, the retailer did away with its special COVID hours for seniors, and in May, it ended its exclusive mortgage program. The price of some of Costco's food products has also been affected by rising inflation, even though membership fees have, surprisingly, remained consistent to date.
Costco made headlines just last week, with Insider reporting that members would see higher price tags for the popular bacon and cheese-stuffed chicken bake and 20-ounce soda sold at its food court. The chicken bake will now cost you $3.99, a 33 percent increase from its previous price of $2.99, and a 20-ounce soda will cost you $0.69, a 17 percent increase from its former $0.59 price tag.
These numbers may feel unsettling, but members can hold on to some hope knowing that one Costco snack staple is apparently immune to inflation.
Members will be happy to hear what Jelinek had to say about one popular product.
In a July 11 interview on CNBC's Squawk on the Street, Jelinek was questioned about the price of one of Costco's beloved menu items—the hot dog.
When asked if Costco would be raising the price of the hot dog and soda combo, the CEO simply responded, "No." According to CNBC, the fan-favorite hot dog and 20-ounce soda combo has been sold for $1.50 for the past several decades.
A former exec feels passionate about hot dog pricing.
Costco's hot dog combo has been sold at its $1.50 price point 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 hot dog price consistent, opting to sell 20-ounce fountain drinks instead of more expensive 12-ounce cans. Apparently, the desire to stay loyal to this price point is actually coming from the higher-ups, as former Costco CEO and co-founder Jim Sinegal once dismissed Jelinek's call to raise the price of the hot dog-soda combo.
"If you raise [the price of the] hot dog, I will kill you," Sinegal told his successor, as reported by 425Business. "Figure it out."
Aside from this conversation, Sinegal has also been vocal in the press about his desire to keep the price at the $1.50 mark. "I know it sounds crazy making a big deal about a hot dog, but we spend a lot of time on it," Sinegal explained to the Seattle Times in 2009. "We're known for that hot dog. That's something you don't mess with."
Customers must appreciate the consistency, as Costco sold 122 million of these combos in 2021, per CNN.
Another Costco perk is safe from inflation, at least for now.
Jelinek also spoke on another cost that has kept shoppers guessing—membership pricing. Currently, a basic Costco membership is $60 annually, while the executive membership is $120. The wholesaler usually jacks up these annual rates every 5-and-a-half years, and with the last hike occurring in June 2017, many were expecting to see a higher bill this summer.
But on July 11, Jelinek told CNBC the increase, which generally totals $10, is "not on the table right at the moment."
"I made it very clear, I don't think it's the right time," he said. "Our sign-ups continue to be strong."