Another surge in producer prices suggests consumers may have to wait a while for inflation relief. But it’s nice for bargain hunters to know that there are still a few juicy targets out there in the marketplace. For example, the Journal’s Joseph De Avila reports:
Costco Wholesale Corp. is eating the higher costs of its popular $1.50 hot dog and soda combo so customers don’t have to.
The warehouse retailer has never raised the price on its hot dog combo, a fixture in the store’s food courts since 1985. Even with the U.S. inflation rate at a more than four-decade high, Costco has no plans to adjust hot dog combo prices in the future either.
“That $1.50 price point has been sacrosanct from the very beginning,” said Richard Galanti, chief financial officer at Costco . . .
At a 2018 luncheon, Costco Chief Executive W. Craig Jelinek recounted how he once told the company’s co-founder Jim Sinegal they needed to raise the price of hot dogs.
“I said, ‘Jim, we can’t sell this hot dog for a buck fifty,’ ” Mr. Jelinek said. “‘We are losing our rear ends.’ And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’ That’s all I really needed.”
. . . Jack Kleinhenz, chief economist for the National Retail Federation, said loss leaders—or products sold below market value to entice customers to purchase other items—are a standard strategy employed by large retailers.
In a time of high prices, customers may sometimes feel like all they really need is a loss leader with mustard and relish. As for Mr. Sinegal, though widely admired in business, he has obviously been underrated as a motivational speaker.