The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo

iStock // Tim Boyle, Getty Images
iStock // Tim Boyle, Getty Images

When Costco president W. Craig Jelinek once complained to Costco co-founder and former CEO Jim Sinegal that their monolithic warehouse business was losing money on their famously cheap $1.50 hot dog and soda package, Sinegal listened, nodded, and then did his best to make his take on the situation perfectly clear.

"If you raise [the price of] the effing hot dog, I will kill you," Sinegal said. "Figure it out."

Taking his words to heart, Jelinek—who became Sinegal's successor in 2012—has never raised the price on Costco's hot dog. Incredibly, it has sold for the same $1.50 since the retail club first introduced the dogs to customers in 1984. The quarter-pound, all-beef tube and 20-ounce soda combo appears to be inflation-proof and immune to the whims of food distributors. How does Costco do it?

Simple. 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.

That means Costco needs to maintain the food court staple with an eye on a steady price. When supply costs threatened to increase in 2009, the company made a major decision: They stopped using Hebrew National, makers of the all-kosher dog that they had used since 1984, and decided to move hot dog production in-house. A Kirkland's Signature hot dog plant was constructed in Los Angeles. When they needed to ramp up production, they built a second plant in Chicago.

They've also had to keep costs on the soft drink side in line. When their deal with Coca-Cola was set to increase the price, Costco opted to sign with Pepsi in 2013, ensuring that their trademark $1.50 price sticker would be kept intact.

Today, Costco sells over 100 million hot dogs annually, which is more than every MLB stadium combined. And they continue to prove surprisingly adept at anything that could add even a single cent to the deal. When California recently enacted a soft drink tax that would have raised the consumer's cost, Costco locations in the state switched the combo to include Diet Pepsi. (Diet drinks are exempt from the law.) The company's "effing hot dog" will continue to remain a steal for the foreseeable future.

How Microwaving Food Affects Its Nutritional Value

iStock/grzymkiewicz
iStock/grzymkiewicz

There’s probably no household appliance that sees more use than a microwave. For people who don’t have the time or inclination to prepare dinners from scratch or heat meals in a conventional oven, zapping food has become the ultimate method of time management in the kitchen.

Some people harbor the belief that a price has to be paid for that convenience—specifically, that food loses nutritional value by being subjected to a quick nuking.

The truth? Microwaving doesn’t harm a food’s nutrients. In fact, it may preserve them more than some slow-cook methods do.

The reason is found in how microwaves work. The appliances heat food by blasting it with waves of energy not unlike radio waves. These waves target water and other molecules in the food. Thermal energy quickly builds up, and dishes come out heated in a relatively short period of time. This process avoids two of the factors that can lead to nutrient loss: cooking duration and high temperatures. Typically, the longer and hotter food is cooked, the more its nutritional value dissipates.

The other advantage is that microwaves don’t require water for heating. If you boil broccoli, for example, the hot water allows nutrients to leach out of the vegetable. (While that makes for a good stock, your broccoli may be robbed of some of its healthy benefits.) A quick steam in the microwave leaves broccoli relatively intact.

That’s not to say that microwave cooking is superior to a stovetop. Cooking foods at reasonable temperatures and durations shouldn’t result in significant nutrient loss, though some is inevitable for any manner of cooking. But microwaving isn’t going to erase nutrients via some mysterious microwave alchemy, either.

[h/t CNN]

Golden Girls Cereal Has Arrived

NBC
NBC

Fans of The Golden Girls can now spend their mornings with Dorothy, Blanche, Sophia, and Rose. The ladies of the beloved sitcom now have their own cereal—and it's only available for a limited time, Today reports.

Funko—the toy company known for its vinyl Pop! dolls depicting nearly every character in pop culture (including, of course, The Golden Girls)—rolled out the special-edition cereal in Target stores on September 30. The box is decorated with Funko-fied versions of the four leading ladies, and the multi-grain loops themselves are a shade of deep blue that would look great on one of Rose's dresses.

At $8 a box, the product is more expensive than your average breakfast cereal, but that price includes a little something extra. Each box of Golden Girls cereal comes with its own version of a prize inside: a Funko Pop! figurine of one of the four women.

The cereal won't remain on shelves forever, so collect all the dolls while you still can.

[h/t Today]

SECTIONS

arrow
LIVE SMARTER