Costco co-founder to new CEO: "If you raise the effing hot dog, I will kill you."

[Stripes]

@Colin_Gelinas

Great example of a “loss leader” in retail.

Maybe, but the strong implication of…

@Jelinek(?)

By having the discipline to say, ‘You are not going to be able to raise your price. You have to figure it out,’ we took it over and started manufacturing our hot dogs. We keep it at $1.50 and make enough money to get a fair return.

…is that they actually managed to reduce costs so they aren’t losing money, just not making the profit other places do off of selling them at “market value”.

I could be mistaken though, maybe it really is a loss leader and “fair return” is actually “gets enough people to come shop at CostCo/is a major factor in people deciding to renew $100ish yearly memberships” or something like that.

@themadpoet

and scheduling people for 40 hour shifts that are decent lengths - would drive up the cost of your meal by 50 cents to a dollar.

That makes employees into full time employees which triggers a ton of extra regulations that have enforcement costs in and of themselves and many also have direct costs (like a health care requirement). So I expect that 50 cents to a dollar is a significant underestimate. Or at least maybe since Starbucks does pay insurance (I think after a year’s employment maybe), and while they have high prices they sure aren’t sky high.

@themadpoet

if you had a choice between two stores - one staffed with enough people to feel confident in the workload, being paid enough to want and value the job they are doing, and more importantly, worried about the quality to ensure they keep the job.

Yeah, you can feel the difference if you go to CostCo or Starbucks. Or more obviously compare Starbucks inside a Target store (which gets staffed by Target employees) v. a “real” Starbucks store.

I generally prefer the place with the employees that actually give a crap (which tends to have higher prices, but doesn’t always), but as you say they don’t always exist.

@anon32019413

The Costco I went to had fountain beverages at the hotdog counter. A lot of potential profit right there. Because if they didn’t have the cheap hotdog I wouldn’t even visit the counter, where I’m likely to also order a drink.

I thought the $1.50 includes a drink, it is the $1.50 hot dog and soda combo. The soda doesn’t add much to the cost, but it does eliminate the possibility of selling $0.20 of sugarbird water and cup for $1 and adding $0.80 profit to the transaction.