Costco's Iconic Hot Dog

Around lunch time there are customers who come into Costco just for the hot dog. The hot dog and soda combination costs $1.50, the same price when it was first introduced in 1984. While the direct cost of the material ingredients could possibly be less than $1.50, Costco undoubtedly experiences a loss once one includes Food Court labor, utilities, and the capital cost of the equipment and space.

Instead of a cost-based approach, the Chronicle estimates what the price would be if it had merely kept up with inflation:

What’s still a $1.50 hot dog and soda would be setting you back well over twice as much: $3.96.

..The $1.50 hot dog deal is more about marketing than money-making, said Martha Gimbel, the executive director of the Yale Budget Lab.

“There’s so much that is changing right now in our world. Everything feels very uncertain. It sounds kind of silly, but you can rely on the fact that Costco has a hot dog for $1.50,” she said...

It’s still a soda and a hot dog, but the dog is now made by Kirkland Signature instead of Hebrew National. They were first sold at carts, then in an area dubbed “Cafe 150” (named for the price), though it’s now just known as “the Costco food court.”

At one point, the food court sodas at Costco came in cans from vending machines, but Costco switched to fountain soda to save money....And this summer, the retailer shifted from Pepsi back to Coke in yet another cost-saving move.

Even at $3.96 I would still buy the combo, but the $1.50 hot dog and $4.99 rotisserie chicken have become iconic. They're also a lifeline to those on a shoestring budget, so kudos to Costco for holding fast.

Costco: Not Just for Those Who Need the Big Carts

A freezer or second refrigerator is an essential
appliance for Costco's small households.

In the August issue of Costco Connection the magazine surveys empty-nest and other small households about why they continue to shop at the bulk retailer.

Dennis Todic, PA: “I buy tires, got my eyeglasses, hearing aids and some of the services like carpeting in the past,” he says. “Bulk is not a factor.”

Derek Zehr, Kitchener, Ontario: Derek Zehr lives by himself, but that doesn’t stop him from shopping for paper products, detergent and cleaning supplies from the warehouse. “I like buying meat in bulk, as well, and I vacuum seal it into individual portions and store them in my freezer,” he says. “I have limited space, but I put shelves up in half of my walk-in closet for my Costco pantry!”

Michele Mathieu, CA: “Shopping sale items, selecting our favorite prepared and frozen foods, and freezing extra bread, chicken and deli ham makes it possible for Costco to be our primary same-day grocery provider,” she says. “Costco is also our first choice when we have a large purchase, such as my wife’s leather reclining chair.

Josh Dill, WA: He lives in a small apartment with his 9-year-old daughter. But that doesn’t mean he shops small...He thinks strategically about his purchases, buying items with a long shelf life to make smaller meals, and freezing the rest. “The package of five frozen single-pound tubes of ground beef is perfect for our dinners,” he says. “I can thaw just the right amount without worrying about waste, and it’s always on hand when I’ve failed to plan ahead.”

A membership still can benefit one- or two-person households who buy high-quantity items that don't take up much space, for example AA batteries and vitamin supplements. It's also suitable for empty-nesters who do have the space, though a freezer or second fridge, which is what we have, is essential. I also have found services such as optical, hearing-aid, and tire installation to be a good value.

Dennis Todic, PA: “But I will be a Costco member until I am not able to shop anymore.”

Another Reason to Get My Eyes Checked

2021: at the Costco optometrist

It's been four years since my last eye exam. Although the contact lenses and glasses still perform adequately, the eyeglass metal frames are bent, and it's probably time to make an appointment.

Here's an additional incentive: [bold added]

For years, doctors have known that high blood pressure, diabetes, smoking and excessive alcohol increase your risk of dementia.

More recently, a growing body of evidence also suggests a link to vision problems, leading to the influential Lancet Commission in 2024 to add untreated vision loss to the list of 14 modifiable risk factors for dementia. The commission, which issues periodic recommendations on public health matters, found that about 45% of dementia cases in the world are potentially preventable by addressing 14 modifiable risk factors — which also include high cholesterol, social isolation and hearing loss — and that 2% of cases can be prevented or delayed by addressing treatable vision loss.

That includes conditions like cataracts, glaucoma, age-related macular degeneration, nearsightedness, farsightedness and diabetic retinopathy (when blood vessels in the retina get damaged, often from poorly controlled diabetes).

A recent study published in JAMA also found that among roughly 2,800 older U.S. adults with dementia, an estimated 5% to 19% of dementia cases were attributable to vision impairment.

I get regular audio exams and updated my hearing aids last year. I should do the same with vision, not only because of the importance of sight but to keep senility at bay.

“When you’re depriving your brain of key sensory inputs like vision or hearing, those parts of the brain aren’t going to function as well,” [UCSF neurologist Dr. David] Soleimani-Mangooni said. “With decreased function, you can start to lose synapses or connections between cells of the brain. That can be a risk, potentially, for further cognitive changes.”

Chicken of Choice

(Chronicle photo)

When Boston Chicken (later Boston Market) introduced rotisserie chicken to the masses in the late 1980's, we were frequent patrons of its restaurants. In 1994 Costco began selling a whole rotisserie chicken for $4.99 (a price which hasn't changed for 30 years), and we visited Boston Market much less often. The Costco chicken was juicy, well-seasoned, and cheap; it was a much better value proposition than Boston Market or any other restaurant.

The Chronicle conducted a blind taste test of rotisserie chicken prepared by 17 different Bay Area vendors. How well did the Costco product measure up?

We took note of saltiness, appraised aromatics and analyzed distinguishing seasonings. We loved schmaltzy, crisp skin and abhorred the rubbery ones. We wanted meat rich in moisture and dreaded when a piece was dry...We rated each on flavor, juiciness and skin. A good chicken excels in all of those categories, which influence the judge’s overall score, on a 10-point scale. The findings show that restaurants typically make better chickens than markets and butchers; they often use higher quality birds...

[Costco's] chicken was by far the juiciest, practically dripping with moisture, and stayed warm longest. The value also must be noted: The price disparity between Costco and every other place was cavernous, nearly five to 20 times cheaper than the rest at $1.16 per pound. However, there is one big caveat: The oversized fowl is only available to those with a Costco membership, which starts at $65 per year.

Without considering the cost, Costco's chicken finished second to Rooster’s Peruvian Rotisserie, a restaurant in San Francisco's Mission district. If we happen to be in that area, we'll check out Rooster's. Meanwhile, Costco's second-best offering will do just fine.

If You Pause on the Paws, You'll Probably Miss Out

At Costco every day seems like there's a Presidents' Day sale. This afternoon I saw chicken feet (aka "chicken paws") being sold for $1.99 a pound. I didn't pull the trigger last November when they were $5.49/lb. at 99 Ranch, but $1.99 is awfully tempting and had me web-searching recipes next to the display.

Chicken feet require hours to prepare, so lacking the time to spend in the kitchen I didn't buy any today. I might not get another chance, however, since at that price, likely to be cheaper than their distributors, the local Chinese restaurants may swoop in and clean out the inventory.

Spam

Costco's semi-annual spam sale used to occur like clockwork in March and September. COVID caused Costco and Hormel to suspend the sales for 3 years, and they resumed in 2022 .

However, the timing is less predictable. The most recent markdown was in August, and another started yesterday.

How will I know when to borrow my neighbor's pick-up truck?

Egg Recall

The eggs we bought at Costco last week have been recalled:

Costco has issued another major food recall due to potential salmonella contamination, affecting over 10,000 units of organic eggs sold at its warehouses nationwide.

The recall, announced Nov. 27 by Handsome Brook Farms, covers Kirkland Signature Organic Pasture-Raised 24-Count Eggs. More than 250,000 eggs were found to have been potentially contaminated with salmonella after being mistakenly packaged for retail sale...

The affected units have the UPC number 9661910680 and a use-by date of Jan. 5, 2025. They were packaged in plastic egg cartons labeled with the Kirkland Signature logo and mostly sold in Southern states.

The Universal Product Code matches the eggs that may have salmonella. We've consumed nine eggs already to no ill effect, but we'll not take any chances and return what's left.

We've been buying foods labeled "organic" because of their putative health benefits, but there is a trade-off. Organic fruits and vegetables need to be washed thoroughly because they are grown without pesticides; some foods spoil faster because they don't have preservatives; and who knows whether egg salmonella has increased because hens are raised without antibiotics?

We still must be vigilant against food-borne illness, and buying organic is no panacea.

Temptation Avoided

In bygone days I might well have succumbed to the temptation. 20-lb. tom turkeys that had been priced at 99¢ / pound were marked down by $10, i.e. they were half-priced.

Getting the turkey would have involved a one-day obligation to prepare, roast, and carve the bird. And to what end? To add 20 pounds of leftovers to those already in the refrigerator.

Tangible objects--turkeys, computers, cars, houses--are not only assets but liabilities. They require a commitment to use, consume, maintain and repair.

The cost of the $10 turkey markdown greatly exceeded the benefit when one assigns a slightly positive amount-even $2/hour--to one's time to extract value from the purchase. I looked at the toms wistfully, then moved on.

There is Still Hope for Us

The rest of the country may consider Northern Californians irredeemable, but this shows there is still hope for us. [bold added]

The weekend before the opening of the Bay Area’s newest Costco [in Pleasanton] brought a now-familiar sight: crowds of people camping out to secure their place in line on opening day. A similar encampment had formed in advance of the opening of the Napa Costco in October — though that hadn’t fallen during an atmospheric river.

These campers descend on new Costco stores largely in search of one item: booze, particularly rare bottles of bourbon.

The devoted drinkers have been eagerly speculating online about whether the Pleasanton Costco, which opens Wednesday at 7200 Johnson Drive, might carry bourbons that have been present at other Costco grand openings like Buffalo Trace Antique Collection, Russell’s Reserve 15 Year and, most coveted of all, Pappy Van Winkle, which notoriously goes for thousands of dollars a bottle from online resellers.

I prefer scotch, but if someone offers me a sip of any of the aforementioned bourbons, I wouldn't turn it down.

Costco: the Good Times are Back

Next to the $14.99/lb ribeye were steaks going for $59.99. A second look revealed that the price was $59.99 per pound. It was wagyu beef, which we had seen in Japan decades ago for $100 per pound, so the Costco price was a relative bargain.

In past years we have gawked at the occasional Costco offerings of $550 hams and $2,150 cognac. Of course, we never pulled the trigger, nor did we do so on the wagyu steaks with the cheapest package going for $240.

Nevertheless, the marketing and buying geniuses at Costco would never have displayed the luxury ribeyes unless there was a good chance they would be bought. The good times are back.

Costco Napa - No Surprise

Selman Medina (Chron photo)

As further proof that its stores are not all alike, the new warehouse that opened in Napa today already is reputed to have one of the best wine selections among Costco's 140 California stores. [bold added]

[Selman] Medina is a Bay Area Costco legend. He spent 11 years commuting from Napa to work the floor of the wine section at the Novato Costco, widely believed to have the best wine section of any Costco in California. He’s one of 30 “wine stewards” employed at Costco stores across the U.S., and according to Bay Area Costco wine buyer Mark Kalkbrenner, he’s one of two wine steward program originals still standing.

Costco is one of the best-run and most popular retailers in the country. It doesn't go overboard on standardization and has a few products (e.g., surfboards in Hawaii warehouses) that cater to the local market. It's no surprise that its new store in wine country has an excellent wine selection, overseen by an expert buyer.

The Spam Indicator

Costco and Hormel are again running their semi-annual Spam sale.

In March the sale price on an eight-pack was $22.99-$5.00=$17.99.

This month both the list price and the discount are a dollar higher, so the net price is the same ($23.99-$6.00=$17.99). At $2.25 per can, the sale price was the same as it was in October, 2022.

If I were part of the Biden-Harris Administration I would trumpet this as a sign that food inflation has abated, but I doubt that many of them purchase canned luncheon meat, and even fewer track its prices.

Costco's LA Housing Venture: If I can make it there I'm gonna make it anywhere

Costco's inventory management is second to none, so it can afford to experiment with selling products like $2,000+ gold bars, $1,150 funeral caskets, or chicken coops; if the items don't move, they can be pulled quickly with limited financial exposure.

However, this new venture is a substantial commitment that cannot be abandoned easily: Los Angeles affordable housing.

The project, to be built by developer Thrive Living and architects AO, was first announced early last year in a press release that revealed renderings of a mixed-use model with multiple floors, open courtyard spaces and other amenities. All told, the build would encompass not only the Costco store (and necessary parking) but a whopping 800 residential units, including 184 set aside specifically for low-income tenants.

Not only is Costco trying its hand at building and operating residential real estate, it's doing so in California, whose regulations make it one of the most difficult places to build.

The city’s upcoming South LA Costco, slated for 5035 Coliseum St. at the intersection with La Brea, is building up on a vacant 5-acre lot that was formerly a hospital. The redone site will not only encompass the store and 800 individual apartments, it will also include a fitness area, multi-use community space, multiple courtyards and landscaped paths, a rooftop pool, and other amenities like gardens. Oh, and lots of parking too, of course.

So how, exactly, is everything going to fit together on this relatively compact lot, particularly when layers of bureaucracy, local input, unique design and state-level lawmaking are added to the cement mix?

“The planning and land use system in California and in LA is a Rube Goldberg machine,” housing activist Joe Cohen tells SFGATE, “and this project is seeing that machine laid bare.”

In a long post on X earlier this month, Cohen described the complex construction hurdles faced by Thrive Living, AO and Costco in detail, ticking off state Assembly bills and union rules for construction projects of this size. The result of all that regulatory navigation is an unconventional building with a less-than-usual look, something Cohen inelegantly dubbed the “Costco Prison.”

Cohen later admitted that the term "Costco Prison" was inapt and voiced his support of the project.

It's difficult to judge the look and feel of a place from drawings, but almost everyone gives Costco the benefit of the doubt due to its track record of success.

Checking and Refilling Tires: Easier Than Ever

"That tire looks flat." More often than not, that statement from a stranger is what usually prompted me to check the air pressure on car tires for over 50 years. (I won't be too self-deprecating; I always checked the water, oil, and tires before leaving on an out-of-town trip.)

Fast forward to 2024. The dashboard on the Lexus flashed the warning light (right). One or more tires had low pressure. Sure enough, the tire pressure gauge showed all four tires to be in the 27-29 PSI range, when they all should have been at 33 PSI.

When I started driving, every service station had an air pump that customers used for free. When self-service became the norm, the air pumps began costing at least 50 cents, and if the customer wasn't quick the machine would turn off after 5 minutes, and he had to feed in more quarters.

Today there is only one service station in Foster City that has a free air pump, and there is usually a line of cars waiting to use it.

But refilling tires has also moved into the 21st century. The local Costco has installed two air pumps by the tire center. No ID required: just input the pressure target, in this case 33 PSI, affix the end of the green tube, and the machine fills the tire until it hits the mark, beeps, then turns off. Repeat three times, et voila, properly pressurized tires. The dashboard warning light switched off.

Costco even uses pure nitrogen gas, which causes less wear and tear than ordinary air.

I'd still shop at Costco even if it didn't have the fancy Nitrogen air pump, but amenities like these only make customer loyalties stronger.

One Sign That Inflation is Abating

Spam is on sale again at Costco. At eight cans for $17.99, it's the same price as it was 17 months ago.

For comparison sake pre-COVID prices were $14.99 in 2019 and $13.99 in 2018.

Inflation is abating, but hopes for disinflation back to 2019 price levels is not going to happen any time soon. But that's ok. I have plenty of Spam to tide me over.

Hot Take

20 years ago there was only one ramen offering on Costco's shelves. Today I counted at least a half-dozen Asian dried noodle products.

Unfortunately, my increasingly sensitive digestive system won't allow me to sample most of them, especially Samyang's Buldak Ramen: [bold added]

Now, [Kim Jung-soo] is CEO.

Behind the 59-year-old’s rise is the unlikely success of a brand of instant ramen she created herself. The noodles are so spicy that many people can’t eat them. Today, packages of the company’s “Buldak” noodles—literally “fire chicken” in Korean—have landed on the American shelves of Costco, Walmart and Albertsons. They will soon arrive in Kroger supermarkets, too.

Kim Jung-soo developed the spicy ramen after observing the popularity of spicy fried rice in Seoul. Her product development skills helped make Samyang become one of the 100 largest companies in Korea and relegated its 1998 bankruptcy to the past.

In a society where it's rarer to find a woman CEO than in the U.S., the 59-year-old Kim looks much younger than her years and will likely lead the company a long time.

Sliver of Good News

My cart was filled like every other one.

On Friday the Costco parking lot was jammed with cars looking for a parking space. Usually I leave immediately and wait for a more opportune time, like one hour before closing. However these purchases had to be made today, as we were making brown-bag lunches on Saturday for Sunday's distribution in Redwood City.

It took 15 minutes to get a distant parking space, then another hour to buy all the ingredients on the list. It didn't help that there were shopping carts going in all directions, carts stopping at the sampler tables, and little kids running with abandon. It's a wonder that I've never seen someone hurt.

Hoping to impress the cashier, I estimated the total out loud would be $325. It turned out to be $308.

That's one sliver of good news, i.e., food prices have abated slightly. Happy New Year (almost)!

Sandwiches on Sunday

Today is the quarterly Outreach activity where our church makes 80-90 brown-bag lunches for the community center.

Digression: it has recently come to my attention that the phrase "brown bag lunch" has racist origins in the minds of a few people. I'm sorry that some are offended, but we oldsters can't remember all the things that we're not supposed to say, especially since the list seems to change every week. Besides, we really do serve lunches in brown paper bags.

Speaking of lists, I blitzed (a German war maneuver, I'm sorry that some are offended etc) through Costco on Friday and bought the sandwich ingredients. The cart was less burdened than usual because I had bought two flats of water earlier.

On Saturday five people put together the lunches at the Parish Hall. The assembly took 2½ hours, an hour longer than usual, because two new volunteers insisted on preparing the sandwiches with loving care as opposed to slapping them together quickly, which is how I like to do things.

Warnings that they would be dismissed if they didn't speed up fell on deaf ears.

After we finished, everyone asked the date of the next Sandwiches on Sunday so they could help again. It must be my management style, because what else could explain their motivation?

Update - noon: The brown bags and bottles of water were all distributed in 15 minutes.

The three ladies in the picture said they all liked their sandwiches.

The Limit of Advance Planning

Costco members buck the trend toward last-minute purchasing. Easter and Halloween products go on sale 1-2 months in advance, and the customers snap them up.

However, a full Christmas display (except for trees) four months ahead? That's pushing the limit of advance planning, and no, I didn't buy anything.

Recovery Confirmed

Returning to the Bay Area, I went to Costco to buy the ingredients for the sandwich assembly tomorrow.

However, I did take a moment to stop at the Spam display to celebrate the sale. Hormel and Costco used to have a semi-annual promotion, which stopped in March, 2019. After a 3½-year hiatus the markdowns resumed last October . There had not been a sale this year, and I feared that the spam recovery signal was false.

Not to worry, the sale is back on in July, and all is right with the world.