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Costco’s secret weapon: Food courts and $1.50 hot dogs

Original Content Publication Date: 10/04/2018


Costco has been able to keep it’s $1.50 hot dog and drink combo for over three decades and it is helping them succeed. Hot dogs are emblematic of Costco's broader strategy to distinguish its warehouses. By maintaining a classic look and low prices despite inflation, Costco has managed to distinguish themselves against the likes of Amazon, Walmart, Target and Kroger. 

Key Points

  • Costco sold over 135 million of their combos last year
  • Costco's food courts make over a $1 billion in sales and have managed to maintain their classic and popular 1980's look
  • The food courts have helped incentivize membership and sales

Discussion Questions

  1. How has Costco managed to be able to keep its prices down?
  2. What is Costco's motive behind having food courts and what advantage does it give them over competitors?


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