For shoppers at retail giant Costco (NASDAQ:COST), there are always reasons to show up, from huge bulk purchases that make it possible to shop once a month to discount pricing and more. But the snack bar is a draw that’s been keeping customers coming back since the Reagan Administration, and Costco is up fractionally in Monday morning’s trading after revealing that it’s kept part of that tradition sacred—at least for now.
Ever since 1985, a hot dog and a 20-ounce soda, complete with free refill, has cost shoppers a whopping $1.50. With its 40th anniversary quickly approaching, the price will likely remain unchanged, according to chief financial officer Richard Galanti.
Galanti recently retired, and one of the last things he did was offer up an interview with Bloomberg, where he made it pretty clear that the $1.50 hot dog deal would at least be around for the rest of this year. Beyond that, of course, he couldn’t say. It’s an assertion he’s been repeating for some time, noting back in 2022 that “lightning just struck me” when asked if the price would go up.
How To Protect A Bargain Hot Dog Deal
There are ways to maintain a deal that seems downright preposterous these days. The first, as Galanti noted, is to maintain margins elsewhere. Proper margins allow Costco to be aggressive elsewhere, like with the classic hot dog deal. Costco’s sheer simplicity helps it bring out loss-leaders like that. But another point won’t hurt either: limiting the deal.
Costco is reportedly poised to crack down on non-members who try to hit the food court for the cheap hot dog deal; signage posted in some areas made it clear. “Effective April 8, 2024, an active Costco membership card will be required to purchase items from our food court.”
Is Costco a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COST stock based on 20 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 53.74% rally in its share price over the past year, the average COST price target of $766.63 per share implies 5.11% upside potential.
