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So, just how much is Costco losing on these $1.50 hot dog combos? According to various estimates, the cost of ingredients such as the hot dog, bun, and condiments hovers around $0.45 to $0.80, not to mention the associated costs for cups and soda refills. Comparatively, if we consider inflation, the hot dog combo should cost around $4.30 today, indicating a significant loss for the retailer of approximately $2.63 per hot dog.
Despite selling around 200 million hot dog combos in 2023, yielding a revenue of about $300 million, this ultimately translates into a considerable loss when factoring in ingredient costs and operational expenses.