Sam's Club makes its hot dog combo cheaper than Costco's at $1.38
There's a retail price war on hot dog and soda combos.
Sam's Club has lowered the price of its hot dog and drink deal at its food courts to $1.38 from $1.50. Its chief rival, Costco, offers the same combo for $1.50.
"New lower price. Same great hot dog & drink combo," Sam's Club said in an advertisement on its website. "Frankly, it can't be beat."
Sam's Club, owned by Walmart, announced the move Tuesday. The chain pointed to the price reduction as an example of ways it offers bargains to shoppers stretched by inflation heading into the holidays.
"The members' dollar [is] going further at Sam's Club, too, with racks of lamb and lobster tails priced more than 40% lower than last year," Walmart CEO Doug McMillon said on an earnings call Tuesday.
The price of frankfurters rose 15.2% annually in October, but Sam's Club and Costco offer cheap hot dogs as a perk for their members.
Costco's hot dog-soda deal has cost $1.50 since it was introduced at its food courts in the mid-1980s. Last year, Costco sold 122 million hot dog-soda combos globally.
Jim Sinegal, Costco's co-founder, once told the company's current CEO, Craig Jelinek, "If you raise the effing hot dog, I will kill you. Figure it out."
Hot dog combos priced at $1.50 are often a loss leader for the companies, especially as costs rise, but it's a strategy designed to get customers to stay in stores longer.
Stops at food courts encourage shoppers to hang around. That extra time increases the chance that they will make an unplanned purchase after they're finished eating.
The companies use a similar strategy with rotisserie chickens. Despite the cost of poultry going up, Costco's rotisserie chickens still cost $4.99, while Sam's Club go for $4.98.
The rotisserie chicken is a prized item for supermarkets because it pulls customers into stores. Typically, customers will shop around and buy more than just a chicken for dinner when they visit.