Costco Vs The MLB: Who Sells More Hot Dogs?

Fresh hot dogs, either loaded up with fancy toppings or drizzled with plain old mustard, are an iconic part of any baseball game. Visit any baseball stadium in the United States and you'll see enough hot dogs in the crowd to rival any Fourth of July cookout. Since baseball season lasts a big chunk of the year, surely that means that Major League Baseball (MLB) is the country's top seller of hot dogs, right? Not quite, in fact. That's because hot dogs are also an iconic part of Costco's famous food court.

Costco's Kirkland Signature hot dogs, which still only cost $1.50 each, are sold at every Costco's food court and they're famously Julia Child's favorite Costco food. They're so popular that the company announced during an annual shareholder meeting that it sold about 199 million of them in 2023. MLB is no slouch when it comes to snack sales, but it's far behind that number. Despite hot dogs being one of the highest-selling concessions at MLB stadiums, they collectively only sell about 19 million hot dogs per year. That's a lot of franks, but Costco wins.

Those numbers become less surprising once you break down the details. There are only 30 MLB stadiums in the United States, from Dodger Stadium to Citi Field. By comparison, Costco has nearly 600 warehouses around the country. In the past, it was also easier to access Costco's food court without a membership, although the retailer has begun cracking down on non-members buying its hot dogs. The hot dogs come with simple toppings like mustard and ketchup and sometimes onions, and you get a soda too.

Meanwhile, you always need a ticket to get into any MLB stadium. Hot dog prices vary between stadiums, too: if you're at a home game for the Miami Marlins or the Arizona Diamondbacks, then a hot dog costs around three dollars. At stadiums for many California teams like the Padres, Dodgers, and Giants, hot dogs cost over seven dollars. The average price is about $5.99, about four times the price at Costco. The tradeoff is that — besides getting to watch baseball — most MLB stadiums have special regional toppings like the Cincinnati Reds' jalapeno-topped "Nacho Dog," or the Baltimore Orioles' more unusual "Crab Mac 'N Cheese Dog."

The reason for Costco's enormously cheap hot dogs, which have stayed at $1.50 since 1985, is something called a "loss-leader" strategy. This is when a company sells a product or service at a loss, knowing that it'll attract more customers who will purchase more things, increasing profits in the long term. Costco heavily markets the hot dog's price point to make customers feel like they're getting huge discounts, which would justify their membership purchase. The strategy works: the Kirkland Signature hot dogs, which Costco makes at its own facilities, helped the retailer make a gross profit of nearly 30 billion dollars total in 2023. The hot dogs are also a personal point of pride for Costco's co-founder Jim Sinegal, who once (probably not seriously) threatened to kill anyone who raised its price.

The strategy for MLB hot dogs is different, and unlike at Costco, they do keep up with inflation. Concessions make up a large portion of a sports stadium's revenue, and those high prices lead to high profit margins. Admittedly though, eating a hot dog at an outdoor game beats the atmosphere of Costco's food court, so perhaps you're paying a little extra for the ambience.