Costco to Offer Coca-Cola in Food Court After Over a Decade of Exclusivity with Pepsi
Costco, the warehouse-style retail chain, has been known for selling Pepsi in its food courts for more than a decade, leaving Coca-Cola fans disappointed. However, starting this summer, Costco will begin selling Coca-Cola in its food courts.
In the upcoming summer season at Costco’s food court, the $1.50 combo deal that previously featured Pepsi with hot dogs will now be replaced with Coca-Cola paired with hot dogs.
Rumors had been circulating about Costco planning this shift since the end of last year. During the company’s annual shareholder meeting on Thursday, January 23, a shareholder asked Costco CEO Ron Vachris if the food court would indeed be “switching back to Coca-Cola products.”
Vachris confirmed, saying, “That’s right. We are transitioning the beverage portion of our food court back to Coca-Cola.”
The reaction to this turnaround on social media has been mixed, but some members are excited about the change. “I guess I’ll be dining at Costco more now,” one Reddit user remarked.
Costco has put out bids to various companies for the beverage portion of its food court, involving not only soda machines and syrup but also cups, straws, and other related products. Until 2013, Coca-Cola had been the main product in Costco’s food court. Pepsi has held the contract for soda machines since 2013.
“This is a significant shift,” a Costco executive said in 2013 when the company made the change. He noted that Coca-Cola had been “the sole provider at most of our locations.”
At the time, Costco stated that the change was made to maintain the integrity of their $1.50 hot dog soda combo price. The price of their hot dog combo has remained unchanged since 1985, with Costco selling approximately 150 million of these combo meals last year.
The move caused some turmoil among members back then. “You can’t please everyone,” Costco’s former Vice President of Food Service Alan Bubitz told BevNET. “Our job is to maintain the integrity of the pricing.”
According to Beverage Digest’s rankings last year, this marks another victory for long-standing leader Coca-Cola, whose market share is over twice that of Pepsi.
For over thirty years, the “hot dog and soda combo” has been a signature fast food item at Costco, priced at $1.50, serving as a key draw for customers.
The combo includes a 1/4 pound all-beef hot dog and a soda priced at $0.69. In total, the Costco hot dog comes to $0.81, while fast food chains nationwide have long abandoned the one-dollar menu.
A quote from Costco co-founder Jim Sinegal to CEO Craig Jelinek in an article by Mental Floss in 2018, reads: “If you raise [the price of the hot dog], I will kill you. Be clear on that.”
Sinegal added, “By the way, if you raise it to $1.75, that’s not a problem. People will still buy it. But if when you think of Costco, you think of the $1.50 hot dog [and soda], that’s a mindset.”
Costco’s food court is strategically located at the entrance and exit of the stores, allowing members to start their shopping journey with a meal. Providing such affordable options can leave shoppers with a favorable impression that prices are equally low on other items when shopping at Costco.