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RetailSam's Club

Sam’s Club launches a price war with Costco—over hot dogs

By
Chris Morris
Chris Morris
Former Contributing Writer
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By
Chris Morris
Chris Morris
Former Contributing Writer
Down Arrow Button Icon
November 16, 2022, 10:27 AM ET
Sam's Club has lowered the price of its hot dog combo meal, undercutting Costco.
Sam's Club has lowered the price of its hot dog combo meal, undercutting Costco.Patrick T. FALLON—AFP via Getty Images

Sam’s Club has taken its rivalry with Costco to the next level.

The big box retailer has lowered the price of a hot dog and drink in its food court from $1.50 to $1.38, undercutting Costco’s long-standing price in an attempt to attract new customers.

“New lower price. Same great hot dog & drink combo,” Sam’s Club said in an advertisement on its website. “Frankly, it can’t be beat.”

Also, unlike Costco, where a membership is required to order at its food court, the Sam’s Club deal is also available to non-members as well.

Hot dogs might seem an unlikely hill on which to mount an assault, but they’re a strategic one. Food courts keep people in stores longer—and that increases the odds they’ll make an additional purchase.

The hot dog deal is a loss leader for both companies, but it’s a draw. Costco’s CEO has vowed to never increase the price of the combo, saying it would remain at $1.50 “forever” on an earnings call in September.

The popular menu item has remained at only $1.50 since the 1980s. Hot dog prices, though, have been on the rise lately, increasing 15.2% annually in October.

That’s not to say the idea of increasing prices hasn’t been floated at Costco. CEO Craig Jelinek discussed concerns about the losses from the meal deal with founder and former CEO Jim Sinegal, at one point.

Sinegal, he told 425 Business, replied “If you raise the effing hot dog, I will kill you. Figure it out.”

To date, Sam’s Club has not lowered the price of its rotisserie chicken, one of the other low-cost draws for shoppers to both stores.

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About the Author
By Chris MorrisFormer Contributing Writer

Chris Morris is a former contributing writer at Fortune, covering everything from general business news to the video game and theme park industries.

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