FURIOUS Costco customers have vowed to “riot” following speculation that the iconic $1.50 hotdog and soda deal could become more expensive.
A price increase for the budget meal could prove to be a “tipping point” for some shoppers.
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One customer warned: “A price adjustment to the food court will be the tipping point that sends the masses scrambling in a manner that will make the French Revolution look like tea time in a geriatric ward.”
Beer brand Samuel Adams said: “Not to be dramatic but I will RIOT UNTIL I DIE.”
The shopping giant is currently undergoing major restructuring at the executive level, sparking shoppers’ fear that the beloved $1.50 hot dog combo is at risk.
Long-time executive Richard Galanti has retired from his role as Costco’s “voice”, and the popular food court combo may see a price hike.
Galanti has been with Costco since 1984, serving as chief financial officer for nearly four decades before stepping down into an advisory role last March.
He left the retailer on January 30.
Nicknamed as the “voice” of Costco to Wall Street, Galanti was known for spotting the trends behind the company’s success and fiercely standing behind the hot dog and soda combo’s $1.50 price point.
He confidently stated that the fan-favorite deal, a menu staple since 1985, would remain at $1.50 “forever” during a 2022 earnings call.
But when Galanti stepped down from his position as CFO last spring, his departure as Costco’s long-time finance chief stirred up uncertainty about the beloved combo’s future.
“It’s probably safe for a while,” he told Bloomberg at the time, marking a major shift in his tone about the deal.
Costco fans have long marveled at how the chain has been able to maintain its $1.50 hot dog combo price for decades.
In 2009, Costco’s assistant vice president of publishing David Fuller offered an explanation that seemed to settle the debate.
“Holding a price that steady for that long sends a clear message about what is possible when you decide to operate your business model on a ‘cost plus’ basis instead of a ‘what the market will bear’ basis,” he wrote in Costco’s magazine.
However, Galanti’s parting words as he left Costco at the end of last month hinted that the warehouse club’s pricing model is becoming more difficult to maintain.
The former CFO reflected on the increasing complexities of running a business in today’s retail landscape.
“I won’t miss the ongoing increasing complexity of running a business,” Galanti told CFO Dive, noting that at its heart, retail is a very simple business.
“You buy stuff and you sell stuff,” he said.
Modern business challenges such as regulatory demands, supply chain challenges, inflation, and other operational pressures could ultimately force Costco’s hand in increasing the price of its $1.50 hot dog combo.
When Galanti stepped down as CFO, he was replaced by Gary Millerchip, the former CFO of grocery giant Kroger.
The seasoned financial chief stated that his successor was “good to go from the beginning” regarding the executive transition, but Costco fans have expressed weariness about Millerchip and what his arrival means for the $1.50 combo.
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“Galanti is retiring, so his influence on Costco’s food court pricing and holding the line on certain prices will be gone soon,” one shopper previously wrote on Reddit.
“His replacement, Gary Millerchip, is the former CFO of Kroger – who was infamous for raising prices to increase the margin.”
Other Redditors feared that Millerchip’s reputation would take a major hit to the Costco brand.
“For a company that prides itself on hiring within, it’s surprising they hired an outsider as CFO and more surprising they hired someone from a company that doesn’t have the best customer focused reputation. I hope this doesn’t change what makes Costco, Costco,” said one customer.
Another user commented that if the chain changed the $1.50 price point, it would be “a disaster” for Costco.
“It’s a symbol for the brand. It’s iconic. It represents everything we all see Costco as and that’s absurd value,” they wrote.
Others speculated that Millerchip’s approach could signal a “major cultural shift” that could lead to “Costco as a whole now [caring] about profit so much that they’re willing to kill an iconic part of their branding for an extra $100 million/year.”
Costco have been approached for comment.
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