Costco has quietly made a change to its food courts that will restrict access to the $1.50 hot dog and soda combo
- Bosses normally turn a blind eye to non-members using food courts
- That is now going to change: staff must check the cards from the beginning of April
Costco is addressing a major loophole in its outdoor food courts.
For years, the department store chain turned a blind eye to non-members who stopped by for its iconic $1.50 hot dog and soda combo.
Staff normally check cards as customers enter the stores, meaning non-members normally cannot eat at indoor food courts. But servers at outdoor food courts in parking garages almost never check.
But that will now change in April – with new rules that will apply to all 18 outdoor food courts across America.
On Reddit, a user posted a sign from outside an Orlando outlet that read: “As of April 8, 2024, an active Costco membership card will be required to purchase items from our food court.”
Costco employees have been instructed to check if customers are members when using the food court
Costco warns it will crack down on a loophole that allowed people to use its food courts even if they weren’t members
Gary Millerchip is Costco’s new CFO. He took over in March. It is not clear whether he supports the stricter rules for non-members at food courts
This was stated by employees at several Costco locations in the US The street that they have been told to check their membership cards when people order food.
The rule is reported to apply to all food courts – both indoor and outdoor. But the staff of the 18 outside have been specifically instructed to check maps.
There has always been a rule that people need a membership to enter warehouses. This means that non-members generally do not have access to indoor food courts.
But at Costco warehouses with outside food courts or kiosks, people without memberships have been able to avoid checks.
As a result, many non-members have become accustomed to being able to purchase the $1.50 combo or other favorites.
It’s the latest attempt to crack down on customers who share membership cards.
Staff at a warehouse in Washington — near the company’s headquarters — began scanning customers’ cards before they entered in January.
This shows a photo of the card holder on a screen, which the employee at the entrance can compare with the person standing in front of him.
Costco’s $1.50 hot dog and soda is a big hit among members and has been the same price for decades
Normally, customers simply show their card to that employee, who may or may not choose to scrutinize the small photo printed on it.
The new system is thought to be a trial ahead of a possible wider rollout.
Costco charges $60 or $120 annually for a basic or executive membership, but is widely expected to raise membership fees soon. The official policy is that anyone with a card can bring two guests on each visit.
Membership fees are an important source of income. A recent earnings report showed they were coming in $1.11 billion for the three months for the year ended Feb. 18, compared with $1.03 billion a year ago.
It means Costco makes about $4 billion-plus per year from the fees.
Costco’s chief financial officer is stepping down after 40 years — and he gave an interview last week about a topic the members are obsessed with.
Richard Galanti is known for sticking with the $1.50 price tag on the company’s famous hot dog and soda deal.
The fan-favorite food and drink combination has been the same price since 1985 — the same year Galanti was named Chief Financial Officer — and two years after the opening of the first Costco.
Pictured is the setup at the entrance to the Costco warehouse in Issaquah, Washington, that allows a store employee to view the photo associated with a membership card
Costco’s membership fees typically account for more than half of the company’s profits
In a 2022 earnings call, Galanti told analysts that the $1.50 price was “sacred” and would remain at that level “forever.”
But this week he gave a less definitive answer when interviewed by Bloomberg.
This week he was asked, “What happens to the $1.50 hot dog and soda combo while you’re gone?”
His response was, “It’s probably safe for a while.”
That’s not as clear as the outlook he gave in 2022 – when he called the deal “sacred.”
Costco fans will now be looking for a clearer answer from Gary Millerchip, the former Kroger executive who is taking over as CFO.
He will likely speak next at Costco’s next quarterly earnings call, expected in June.