master-cooks | Costco Vs The MLB: Who Sells More Hot Dogs?

Costco and Major League Baseball (MLB) both have strong reputations for their hot dog sales, but they serve different markets and experiences. Costco is famous for its food court deal, offering a hot dog and a soda for a remarkably low price, a staple of the shopping experience that attracts millions of customers annually. The affordability and consistency of Costco's offer have led to the sale of over a hundred million hot dogs each year. On the other hand, MLB games provide a traditional ballpark experience, where hot dogs are an iconic part of the game-day atmosphere. While individual sales might be higher at Costco due to its everyday availability and pricing, MLB games sell millions of hot dogs each season across all its teams. The context of these sales is different, with Costco appealing to everyday shoppers and MLB capitalizing on the nostalgic and communal aspect of enjoying a hot dog during a live game. Ultimately, while Costco may sell more hot dogs in sheer volume, both entities have successfully embedded hot dogs into their core offerings, each contributing to the cultural landscape of American food experiences in their unique ways.

Costco strikes out other hot dog vendors

The figures become less astonishing when you examine the specifics. There are only 30 Major League Baseball stadiums across the United States, ranging from Dodger Stadium to Citi Field. In contrast, Costco operates nearly 600 warehouses nationwide. Historically, it was easier to access Costco's food court without a membership, although the retailer has started to restrict non-members from purchasing its hot dogs. These hot dogs typically come with basic toppings like mustard, ketchup, and occasionally onions, and they include a soda as well.

On the other hand, entry to any MLB stadium always requires a ticket. Prices for hot dogs can differ from one stadium to another: at home games for the Miami Marlins or the Arizona Diamondbacks, a hot dog costs around three dollars. However, at stadiums for several California teams, such as the Padres, Dodgers, and Giants, hot dogs can exceed seven dollars. The average price hovers around $5.99, which is roughly four times higher than at Costco. The tradeoff is that, in addition to enjoying a baseball game, many MLB stadiums offer unique regional toppings, such as the Cincinnati Reds' jalapeno-topped "Nacho Dog" or the Baltimore Orioles' distinctive "Crab Mac 'N Cheese Dog."

The marketing power of hot dogs

Costco's remarkably low-priced hot dogs, which have remained at $1.50 since 1985, are a result of a strategy known as "loss-leader." This approach involves selling a product or service at a loss to draw in more customers, who will then buy additional items, ultimately boosting long-term profits. Costco promotes the hot dog’s price to create a perception of significant savings, reinforcing the value of their membership. This tactic has proven effective: the Kirkland Signature hot dogs, produced in Costco's own facilities, contributed to the retailer's gross profit of nearly $30 billion in 2023. Additionally, Costco's co-founder Jim Sinegal takes personal pride in these hot dogs, famously (though likely in jest) threatening to harm anyone who suggested raising their price.

In contrast, the pricing strategy for MLB hot dogs is different, as they do adjust prices in line with inflation. Concessions represent a significant portion of a sports stadium's revenue, and the elevated prices result in substantial profit margins. However, enjoying a hot dog at an outdoor game offers an experience that surpasses the atmosphere of Costco's food court, so you might be paying a bit more for the overall ambiance.

Costco Vs The MLB: Who Sells More Hot Dogs?

Costco strikes out other hot dog vendors

The marketing power of hot dogs

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