Sams Club has taken its rivalry with Costco to the next level.
The big box retailer has lowered the price of a hot dog and drink in its food court from $1.50 to $1.38, undercutting Costcos long-standing price in an attempt to attract new customers.
New lower price. Same great hot dog & drink combo, Sams Club said in an advertisement on its website. Frankly, it cant be beat.
Also, unlike Costco, where a membership is required to order at its food court, the Sams Club deal is also available to non-members as well.
Hot dogs might seem an unlikely hill on which to mount an assault, but theyre a strategic one. Food courts keep people in stores longerand that increases the odds theyll make an additional purchase.
The hot dog deal is a loss leader for both companies, but its a draw. Costcos CEO has vowed to never increase the price of the combo, saying it would remain at $1.50 forever on an earnings call in September.
The popular menu item has remained at only $1.50 since the 1980s. Hot dog prices, though, have been on the rise lately, increasing 15.2% annually in October.
Thats not to say the idea of increasing prices hasnt been floated at Costco. CEO Craig Jelinek discussed concerns about the losses from the meal deal with founder and former CEO Jim Sinegal, at one point.
Sinegal, he told 425 Business, replied If you raise the effing hot dog, I will kill you. Figure it out.
To date, Sams Club has not lowered the price of its rotisserie chicken, one of the other low-cost draws for shoppers to both stores.
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