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How Costco Prices the Hot Dog and Keeps It at One Fifty
In this episode of Pricing Power, Lucas and Luna explore the economics behind Costco's legendary $1.50 hot dog and soda combo, a price that has held steady for over four decades. They break down how Costco uses the hot dog as a loss leader, the role of the company's famous cap on food court margins, and the supply chain decisions that make the price possible despite inflation. They also dissect the broader pricing philosophy at Costco: why the membership fee is the real profit engine, how the company's treasure-hunt model drives impulse purchases, and what happens when a CEO…
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