Costco said it will stop serving Pepsi beverages at its food court soda fountains, and will switch to Coca-Cola products this summer, while keeping its famous hot dog soda combo price at the iconic $1.50.
Ron Vachris, CEO of the warehouse retail giant, announced the switch during a live webcast if the company’s shareholder meeting last Thursday.
“This summer we will be converting our food court fountain business back over to Coca-Cola,” Vachris said, answering a question from a shareholder about the rumored switch.
Costo Insider had reported on the decision in December, though at the time it was said the switch was expected to happen in early 2025.
“Coke has a much higher focus on the quality of the product coming out of the machine, including guidelines on machine maintenance, syrup mix, and more to ensure a consistently great experience for Costco customers,” the outlet argued.
The change marks the end of a 12-year partnership with Pepsi.
Costco used to serve Coca-Cola but made the switch to Pepsi in 2013 to be able to keep the price of their famous hot dog and soda combo at $1.50—a price that had been unchanged since 1985, according to CNN.
“While the original switch was a cost-saving measure, the return to Coke products is likely driven by customer preference and Coke’s renewed commitment to quality and partnership with Costco,” Costco Insider reported.
The switch is a great deal for Coca-Cola, given that Costco reported selling a record 229 million hot dog and soda combos in 2024—up from nearly 200 million the year before, and 156 million in 2022.
In May 2024, brand new chief financial officer and executive vice president Gary Millerchip already promised that “the $1.50 hot dog price is safe.”
The path remains clear for Costco’s legendary hot dog and soda combo to become the first menu to keep its price ticket unchanged for 50 years—even though the offer has cost the company money for years.
“We’re known for that hot dog. That’s something you don’t mess with,” Costco co-founder Jim Sinegal told the Seattle Times in 2009.
“When you get customers who are that delighted with something, it’s worth your time and energy to make it work.” Sinegal made it clear that the price won’t go up for as long as he lives.
The $1.50 soda hot-dog combo is one of the most successful “loss-leaders” in retail history—while the product itself is sold at a loss, the customers it draws in more than make up for it.
Costco opened its first warehouse in Seattle, way back in 1983. The company has since grown to 897 locations worldwide, with total sales in 2024 exceeding $249 billion, an increase of 5 percent over last year.
“As we’ve done in the past on a frequent basis, in fiscal 2024 we rewarded our employees by increasing wages across our pay scales in the U.S. and Canada and other parts of the world,” the company said.
