Costco is making waves by announcing the return of Coca-Cola products to its food courts, marking the end of more than a decade of exclusively serving Pepsi. This shift was confirmed by Costco’s President and CEO Ron Vachris during the recent shareholder meeting, where he responded to questions from investors about upcoming changes at the retailer.
"Yes, that's accurate," Vachris said. "This summer, we will be converting our food court fountain business back over to Coca-Cola." This means beloved drinks like Coca-Cola Classic, Diet Coke, and Sprite will soon take their places alongside the iconic $1.50 hot dog combo once again.
The decision to revert to Coca-Cola follows 12 years of Pepsi’s reign at Costco, which began back in 2013 when the company opted for Pepsi products to lower costs and maintain their famously low-priced hot dog combo. Vachris's announcement indicates not only the return of Coke products but also aimed to sustain the retailer’s well-known price point. The details of this decision had been anticipated after earlier reports emerged, indicating Costco was planning to return to Coca-Cola.
By dropping Coke back then, Costco aimed to cut costs necessary to preserve its hot dog and soda price, as multiple sources have indicated. The change to Pepsi was made after Coca-Cola reportedly would not match prices offered by competitors like Walmart, which put Costco, known for its value-driven strategy, between a rock and hard place.
Speaking about the hot dog combo, Costco’s CFO Gary Millerchip confirmed during earnings calls earlier this year, "To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe." This decision has culinary significance for Costco; it becomes part of its brand identity, one echoing the founder Jim Sinegal's insistence on keeping prices low for their consumers. Sinegal famously stated, "That I’m dead," when discussing potential changes to the price of the hot dog combo, showing just how serious the matter was to him.
While speaking with the media, Costco's former executives have expressed their belief around how the hot dog deal emphasizes Costco's value proposition. Indeed, the combo has remained unchanged since its introduction, which, according to reports, would otherwise have cost around $4.50 if adjusted for inflation.
The food court alterations come amid discussions about future expansions and price adjustments across Costco's item range, where the promise to keep the price unchanged provides assurance to members who value Costco's offering.
The news has sparked excitement among Costco enthusiasts, many of whom took to social media to express their love for Coke over Pepsi. One user on the Costco Insider’s comments forum expressed joy, stating, "Coke is a much, muchbetter option. I'm happy for this news!" Another commented, "Thank you!! I only drink Pepsi when it's a last resort. Glad you are going back to the good stuff." This excitement reflects just how iconic the Coke and hot dog combo truly is to loyal customers.
On record, Costco sold approximately 229 million hot dog combos during its last fiscal year, signaling significant demand from members who enjoy this longstanding deal. For many, this will mark not just the return of preferred beverage options but also rekindle fond memories associated with dining at Costco.
With the return of Coca-Cola products planned for this summer, members can anticipate high-quality sodas pairing once again with their favorite hot dogs, securing Costco's position as not just a retail store, but rather, as a culinary destination for value-seeking shoppers.