Money may earn a commission when you click on the products and services below. Opinions are our own,
but compensation and in-depth research determine where and how they appear. Learn more about how we make money.

Editor:
Published: Nov 17, 2022 3 min read
Photo Illustration of 2 hot dogs clashing in a battle
Money; Getty Images

Costco no longer has the cheapest hot dog deal in town.

During an earnings call this week, Walmart CEO Doug McMillon announced that Sam’s Club, the warehouse club owned by Walmart, will reduce the price of a hot dog and soda combo by 12 cents to $1.38.

The price cut means that the in-store treat is now cheaper than its legendary counterpart at rival chain Costco.

Costco's $1.50 hotdog and drink combo hasn’t changed since 1985, even as other prices have soared in subsequent decades. This fall, the Costco CFO Richard Galanti reiterated that the chain would keep the price of the combo the same “forever.”

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Personal Loans can help you in your time of need
If you're struggling to get back on track, applying for a Personal Loan is a step in the right direction. Click on your state and find out more.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Get Started

Why Costco hot dogs and rotisserie chickens are so cheap

The announcement came as McMillon outlined plans to reduce prices on certain popular items even as persistently high inflation pushes costs higher for businesses and shoppers alike.

“We're removing inflation on a basket of traditional Thanksgiving food items,” he said, “including whole turkeys for under a dollar per pound.” McMillon also said racks of lamb and lobster tails in Sam's Club stores are more than 40% cheaper than they were last year.

Pricing some items very cheaply — sometimes so cheap that the retailer doesn’t even make a profit — is a tried-and-true strategy for warehouse stores like Sam’s Club and Costco.

“There are some businesses that are doing well with margin,” Costco’s Galanti explained in September, like gasoline and travel, where the store makes a big profit. “Those things help us be more aggressive in other areas.”

The idea is that even though Sam’s Club or Costco won’t make profits on what retail experts call “loss leaders,” like $1.50 hot dog combos, or $4.99 rotisserie chickens, or legs of lamb, customers will shop more often and spend money on higher-margin products elsewhere in the store.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
You never know when you might find yourself financially strapped - the good news is you have options.
A Personal Loan can help you mitigate losses and get back on track. Click here to explore your options!
Get Started

More from Money:

How to Get a Free Turkey for Thanksgiving

7 Best Credit Cards of November 2022

Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs