The Costco Legend (It is not Chicken!)

Really, it's not chicken.  This September 15th will be the anniversary of the opening of the first Costco which opened in Seattle, Washington.  Costco will be 43 years old. Only a couple weeks before that my wife and I will be celebrating our 43rd anniversary.

The two owners of Costco, Jim Senegal and Jeff Brotman, were told that charging people for a membership would not work and they would fail. Senegal had studied this model for thirty years and worked for Sol Price who started The Price Club in 1976 when the warehouse model of selling to small businesses began.

Some of the criticism was this: "You're charging customers for the privilege of buying from you?" "You're not going to advertise? At all?" "You carry 4,000 products. Walmart carries 120,000. How is that a business?" "Selling 48-packs of toilet paper in a warehouse isn't retail, It's storage."

They were wrong, What Senegal knew was that people wanted fewer options and better prices and they didn't want to be manipulated. He set margins on his profit and would not exceed them.  The legendary example is what they did in 1985 with hot dogs, not chicken.

The hot dog/soda combo cost $1.50 in 1985 and it cost $1.50 in 2026.  In 2025 Costco sold 245 million combos.  To keep the same price they had to fire Hebrew National and also switch from Coca Cola to Pepsi.  He started his own meat processing plant and started producing Kirkland Signature hot dogs.  Kirkland Signature does $90 billion dollars in annual sales.

Costco has 924 locations and does 275 billion in revenue with 85% of their stores in the United States with 341,000 employees.  

These days you can read many bad stories about companies, but Costco is a great example of putting people first for a very long time and their success is proof of it.  The chicken is pretty good too.

The new CEO recently announced that the hot dog/soda combo will always be $1.50 while he is in office.

Before I could post this blog Costco added an option to this special deal.  You can now get a 16 ounce bottle of water with your hot dog instead of a soda. The Costco Legend still remains.

Costco in Ocean Township, New Jersey