Costco Hot Dogs at $1.50 are the same price from 1984 to 2018 - AMAZING LOSS LEADER
FIND OUT WHY Costco never raised their price of their hot dogs in 34 YEARS!
When you think of Costco hotdogs, you think of a tasty treat for a great value!
The hotdog isn't $1.50, it actually comes with a large soda with free refills too!
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How do they do it? Why do they do it?
Costco learned back in 1984 that the hotdogs and price were very popular among their customers. If you feed someone with hunger, they'll feel satisfied and happy with their experience.
IKEA does something similar with their low cost meals.
Other stores that did this too was:
KMART, ZELLERS, WOOLCO, WOOLWORTHS, SEARS all of these stores that use to have an in-store restaurant with cheap value meals priced super cheap.
As times changed these stores dropped their in-store restaurants because they were the easiest to get rid of since they were loss-leaders for the store.
What happens when you get rid of your loss-leader for profit?
You lose your customers. That's exactly what happened to KMART, ZELLERS, WOOLCO, WOOLWORTHS and SEARS. Almost all of them are no longer in business or going out of business today.
In order to keep your profits coming, you have to give something back to the customer, to allow them to feel like they aren't always getting cheated when the retail cost of items continues to go up.
... so the lesson here is ....
It takes money to make money. Unfortunately some high level retail executives forgot that important lesson.
IKEA is bigger than ever, so is COSTCO, they are both doing well, and they both sell hot food for cheap. :)
I can only imagine the amount of disagreements in the boardroom at Costco as people kept suggesting "We need to raise our hotdog and soda price, even just to $2.00"
...they never did in 34 years, and their customers love it.
Thinking outside of the box, and taking a loss to support the rest of your business doing well, takes a lot of bravery, and risk. Their plan worked.
So next time you eat a hotdog and drink a soda for $1.50 at Costco you can feel like you are still in 1984 eventhough the rest of the world has changed so much.
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With appreciation, I thank mashed for their youtube video which explains it in greater detail below.
HIT PLAY AND ENJOY :)
Thanks to COSTCO for not raising their hot dog prices in 34 years. You've fed a lot of hungry people in that time.
You should be a business executive. So many people wearing suits and ties and spend years in college and real life business experience can still bring lead giant firms like Sears and Kmarts down the gutter amazes me. Pathetic they are. Your example is clearly proving that even executives at those failing firms are out of place with the majority of the population just like the government.
I am definitely getting a hot dog this weekend at my nearby Costco ;) Thanks.
Your comment is amazing too. Enjoy your hot dog. :)
A combination of foresight and understanding of the consumer behavior, good on the executives of Costco/Ikea for realizing their business is in moving volume rather than profiting from a hot dog sale.
It's good that Costco sells an incredible price for 34 years.
In my opinion, it is better to sell at low prices and in large quantities
They sell at high prices and sell small quantities.
A year ago I attended a greengrocer and the business owner
I had the fruit at low prices, the demand was very good.
Over the course of 1 year, the owner increased the fruit
Believing that it would become richer, but failure now is not even
the shadow of what used to be the fruit shop.
This is correct. Any business can benefit with a good strategy. As long as a customer walks away with a good experience and is happy they will always return.
This is why in the USA many uber drivers who are like taxi drivers also carry bottled water, phone chargers, and other things. They do this to make the customer happy and give them a good rating or extra money for a good tip and gratuity.
They worry for they customers and they try to conserve that price to create a real connection or tradition in people, i like this kind of strategies because is a win to win for each parts. Regards friend
Wow very nice costco.i loved this.
Great insight! This mindset should be implemented across any industries.
According to you why costco could sell with that price?
When all the ingredients have been jumped.
I answered this question if you read the blog and watch the video.
ok...@intelliguy
now I understand.
the leader is very important within businesses and costco has it.!!
what do you means "it takes money to make money"??
thanks @intelliguy
When you give away something cheap, even at a loss, to make your customer happy, your customer will buy more from you in the future.
Thank for this information @intelliguy
i get new from u.
interesting research done and it is valuable because you get to understand the success of the green merchant with the passing of the years. bravo for your dedication
It totally works on me. It's lunch time, but I'm not very hungry, and I'm in the area… Guess I could swing by Costco for a dog. Oh, but while I'm there, we're low on toilet paper… and toothpaste… I'll get some soda for the wife… and might as well gas up the car…
Cheers to Costco. I've been a loyal customer for over a decade now.