In an era of endless inflation worries, Costco has made headlines by doubling down on what was already one of their most talked about deals: the hot dog and soda combo. While the price of other items in the food court have crept up, a dog and a drink have cost $1.50 since 1985, and as recently as September, Costco’s CFO Richard Galanti surmised the combo could stay at that price "forever."
As America's second largest wholesale club chain, Sam's Club must have gotten sick of hearing all this $1.50 talk because they've resorted to one of the oldest tricks in the book to steal attention away from Costco and perhaps lure in some of their customers. The Walmart-owned brand is undercutting Costco, dropping the price of its own hot dog and soda combo to just $1.38.
The change was mentioned yesterday during Walmart's earnings call with CEO Doug McMillon saying the change at Sam’s Club was about "making the everyday shopping trip better."
That's not to say Sam's Club wasn't trying to keep up with Costco before: Previously, Sam's Club's hot dog and soda combo was priced exactly the same as their competitor's — $1.50 — but Sam's Club is hoping a 12-cent drop will pay back in great publicity for what a brand spokesperson described as possibly "the hottest topic in retail cafe news in the past decade."
Beyond price, the two combos are relatively similar. Both are advertised as using quarter-pound hot dogs. Sam's Club's deal includes a 32-ounce fountain drink compared to Costco’s 20-ounce soda — but both are offered with refills.
However, Sam's Club also chimed in with one other advantage they offer over Costco combo: "Unlike others, anyone can eat in the Sam’s Club cafe — member or not. It's part of the magic of Sam's Club and why their cafes attract so many guests," their representative wrote.
So how will Costco react? As their 37-year price freeze on the cost of their combo has proven, the brand has a bit of a reputation for sticking to their guns. As such, don't be surprised if this first shot in the new Hot Dog Combo Wars doesn't receive any return fire.