Costco has charged the same price for a hot dog and a cup of soda for the last 36 years. A dollar fifty buys you a quarter-pound beef hot dog and a 20 oz cup of soda. How can it charge the same price it did in 1984? Mental Floss has the answer:
When it comes to hot dogs, Costco doesn't price according to what the market will bear. They price according to their own cost and according to the value the hot dogs can afford them.
According to Jelinek, people would pay $1.75, and maybe more, for the deal. But is that extra 25 cents going to be more valuable than the goodwill and foot traffic generated by a combo that's stuck to its price point for nearly 35 years? Probably not. Customers coming in to shop at Costco are amused, satisfied, and fueled by the hot dog meal. If they get it just before leaving the store, they're left with a lasting impression of being treated well. That's worth more than keeping up with inflation.
