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Costco’s Inflation-Proof Combo

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J.D. DURKIN: If you are a fan of the famous buck 50 hot dog combo at Costco  (COST) - Get Free Report, you're in luck. And that's because the company announced in its quarterly earnings that the popular fixture of a hot dog and a 20 ounce soda, which has been offered on the Costco menu since 1985, will stay locked at dollar 50, at least for now.

Costco has maintained a bit of a stubborn insistence on continuing to sell the famous hot dog combo for $1.50, even as inflation has jacked up the prices for everyday household staples and foods including, yes, hot dogs. According to the Bureau of Labor Statistics, the price of the combo would be $4.13 if it kept up with today's inflationary figures. But for Costco, which sells about 130 million hot dogs every year, it is a signature item.

Yes, individual sodas, chicken bakes and pizzas, all those things are now a bit more expensive at Costco. But for a company that truly wants to be the best value in the marketplace, the hollowed hot dog combo is sacrosanct, in the words of Costco's Chief Financial Officer.

For the time being, there's no expected hike in membership price either. The company cited inflation's burden on its members. Costco typically raises membership prices every five years or so. Earlier this month, its rival, Sam's Club, which is owned by Walmart, announced its first membership hike in nine years.

Despite the headwinds of the last year, Costco's revenue still rose 16%. And while analysts expect membership costs to go up in 2023, at least for now, it might be some small consolation that, just like it was way back in 1985, a hot dog in a soda will still only run you $1.50.

That'll do it for us here at TheStreet. Stick with us for more on this and every other top market story that matter to you.

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