Hot dog battle: Sam's Club is selling a cola sandwich combo for $1,38, which is even cheaper than Costco

Sam's Club has reduced the price of hot dogs and drinks in its food courts to $1,38 from $1,50. Its main competitor, Costco (COST), offers the same combo for $1,50, reports CNN.

Photo: IStock

“New lower price. Same great hot dog and drink,” Sam's Club advertises on its website. “Honestly, it’s impossible to find a better deal.”

Sam's Club, owned by Walmart (WMT), announced on Nov. 15. The chain pointed to the price cuts as an example of how it offers discounts to shoppers who are saving money due to inflation.

"The membership dollar at Sam's Club is also on the rise, with lobster ribs and tails priced over 40% off last year," Walmart CEO Doug McMillon said in a statement.

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In October, sausage prices rose 15,2% year on year, but Sam's Club and Costco are offering cheap hot dogs as a perk to their members.

Costco's soda and hot dog offering has cost $1,50 since it was introduced to its food courts in the mid-1980s. Costco sold 122 million hot dog and soda combinations worldwide last year.

Jim Sinegal, co-founder of Costco, once told current CEO Craig Jelinek, “If you raise the price of a hot dog, I will kill you. Deal with it."

$1,50 hot dog and soda combos are often the biggest losers for businesses, especially as costs rise, but the strategy is designed to keep customers in stores longer.

Stops at food courts encourage shoppers to wander around. This extra time increases the likelihood that they will make an unplanned purchase after they finish eating.

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Companies are using a similar strategy with grilled chicken. Despite the rise in poultry prices, Costco grilled chicken is still $4,99 and Sam's Club is $4,98.

Grilled chicken is a valuable commodity for supermarkets because it attracts customers to stores. Typically, when visiting, customers go shopping and buy more than just chicken for dinner.

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