Costco CEO: Membership Fee, Hot Dog Prices Won't Change
Costco CEO Craig Jelinek said Monday (July 11) that it’s “not the right time” for the bulk-discount retailer to consider price increases in membership fees — or on the price of the company’s iconic hot dog combo meal.
Jelinek told CNBC there was no inflationary environment that would make the company consider raising its hot dog combo price, a staple of the store for shoppers at $1.50 including a 20-ounce soda since 1985. He said the strength of U.S. consumers is “not so bad,” when facing inflation a tightening labor market, ongoing supply chain issues and the potential of a looming economic recession, which could lead to “huge amounts of inventory” across Costco stores.
Costco’s stock price is down more than 12% this year, including a slight decline following Jelinek’s comments to CNBC Monday.
The company reported a 10.8% jump in same-stores sales in the quarter ending May 8, with online sales up almost 8% in the that timeframe, helping overall revenues rise 16.3% to $51.61 billion. Membership revenues rose 9.2% to $984 million in the quarter.
Related: Costco Keeps Hot Dog Bargain, but Membership Fee Could Rise
Last month, Costco Senior Vice President Bob Nelson shot down rumors during the company’s third-quarter earnings call that the warehouse club’s hot dog and soda combo would rise, doubling down on culinary deals by adding that Costco’s $4.99 price for rotisserie chicken would also remain.
While both steals are loss leaders at the discount warehouse chain, the deals are popular with members who rarely stop in for just a hot dog or a chicken. Nelson said there was false information “floating around on social media and a few other media outlets” that said Costco upped the hot dog combo price.
Costco typically raises its annual membership price every five to six years, with the last one happening in June 2017.