Sam’s Club and Costco argue over the price of hot dogs in the food court
Sam’s Club has taken its rivalry with Costco to the next level.
The major retailer has slashed the price of a hot dog and drink in its food court from $1.50 to $1.38, undercutting Costco’s longstanding price to attract new customers.
“New lower price. Same great hot dog and drink combo,” Sam’s Club said in an ad on its website. “Honestly, it can’t be beat.”
Unlike Costco, where membership is required to order at its food court, the Sam’s Club deal is also available to non-members.
Hot Dogs might seem like an unlikely hill to launch an attack on, but they’re a strategic one. Food courts keep people in stores longer — and that makes them more likely to make an additional purchase.
The hot dog deal is a loss-maker for both companies, but it’s a tie. Costco’s CEO has vowed never to raise the price of the combo, saying it would stay at $1.50 “forever” on a September earnings call.
The popular menu item has stayed at just $1.50 since the 1980s. However, hot dog prices have been rising recently, rising 15.2% annually in October.
That’s not to say the idea of raising prices hasn’t surfaced at Costco. CEO Craig Jelinek once discussed concerns about losses from the food business with founder and former CEO Jim Sinegal.
Sinegal, he said 425 businessHe replied, “If you raise that darn hot dog, I’ll kill you. Find out.”
To date, Sam’s Club has not lowered the price of its fried chicken, one of the other bargain-priced attractions for shoppers from both stores.
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