This is still so oversimplified. There's always bellwether products customers buy a lot and get used to. They use those to decide if you are cheap or expensive. Costco hotdogs are about satisfaction. If I can get one good deal or even a great deal that I find every time, I'm much more likely to be satisfied.
I was just thinking about this. Costco either loses money on or just barely breaks even on their hotdogs, but they keep selling them at $1.50. It's a part of their brand.
It would be smarter for them to raise the price of their membership another $10/yr to offset the losses than it would to raise the price of their hot dogs another $0.50 to make them profitable.
Don't know if it had anything to do with the price of hotdogs, but Costco did just increase their membership prices.
https://customerservice.costco.com/app/answers/answer_view/a...
I wouldn't be surprised if costco writes off the loss on hot dogs as a marketing expense.