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Further decline in the value of the Costco Hot Dog



Further decline in the value of the Costco Hot Dog

In July 2013, I wrote a post on EconLog titled “The Economics of Self-Imposed Price Ceilings.” The example was the Costco hot dog. I pointed out that by keeping the price of a hot dog and soda at $1.50 with free refills, Costco, over time, to reduce losses, reduced the quality of the product. I may have been wrong in saying that the new hot dog is inferior to the old Hebrew National brand. The brand Costco switched to is still pretty good.

But I wasn’t wrong when I said that Costco stopped letting the customer spin a crank that yielded sauerkraut and instead put sauerkraut behind the counter.

There have been two more changes, one that I noticed over the past two years and one that I noticed today. At some point in the last two years, Costco discontinued the sauerkraut available behind the counter.

Today I noticed another change. Costco has stopped selling the onions you used to get by turning the crank. So now all you get is mustard, ketchup and relish.

In case you’re wondering, I’m obviously not advocating that any government agency regulate Costco’s choices about hot dogs. I’m simply pointing out the predictable consequences of price freezes in a time of inflation, even if the freezes are self-imposed.