Costco co-founder to CEO: “If you raise the effing hot dog, I will kill you.” | Hacker News Reader

Costco co-founder to CEO: “If you raise the effing hot dog, I will kill you.”

boingboing.net

67 pointsf43029 comments

> What we figured out we could do is build our own hot dog-manufacturing plant (in Los Angeles) and make our own Kirkland Signature hot dogs. Now we are doing so much hot dog business that we've opened up another plant in Chicago.

This reminded me of the odd fact that Volkswagen also produces their own sausage and ketchup:

https://en.wikipedia.org/wiki/Volkswagen_currywurst

Oh that's cool! It's not so odd if you look at the history, owning your own food supply chain was the only way to supply large amounts of food for your factory workers back then. Daimler-Benz for example had pig farms, slaughterhouses etc close to their factories up until the 60s. Today food is abundant, so it's nice to see that VW carries on a tradition.

My god, click the privacy button on that site if you want to be horrified.

What even is the linked article? The vast majority is just directly quoting a different article. The one part which isn’t just a direct quote which looks possibly like it’s own “reporting”, the one sentence at the start, is actually just directly lifted from the quoted article as well, absolutely nothing is added.

Then the quoted article has so many random words highlighted linking to either tenuously related articles or the same content just rehashed slightly differently.

Is this what the web is now? Content farms ripping content farms all competing to send your precise location and browsing history to as many partners as they can? How many lifetime-hours are spent on this? Depressing...

This is why I pulled BoingBoing from my RSS feed. They were regurgitating other news article like Buzzfeed and Mashable. They used to have good original content but I don’t know what changed.

Just completely stop visiting toxic dumpster fire websites like boingboing and its ilk for any reason whatsoever, and problem solved on a personal level. They'll still be there screwing other readers, but you can at least know you dodged revolting nonsense. The web still has good content from sites that are at least semi-reasonable about creating their own value without desperately tracking everything you do.

Are you asking how many hours are wasted creating this or by digesting this?

Because I can assure you that very little is actually spent on the creation side, which is kind of the point.

"is that extra 25 cents going to be more valuable than the goodwill and foot traffic generated by a combo that's stuck to its price point for nearly 35 years?"

Goodwill? Goodwill? Who thinks like that any more? If you know of any, tell me, I'm begging to shop there.

Retailers earn 2% to 3% profit margins. How much goodwill can they afford?

I've not had experience of anything like the scale of Costco before or in food, but what I know of retail is that margins are typically double the cost price. Where would such a low figure come from?

Edit: phrased poorly. The profit margin is typically the same as the cost price at the till - this doesn't take into account deducting the cost of running the business, etc.

Not sure where the double the cost price coming from. Different Segment of Retail have different price structure. Double would be the norm for Electronics or anything that are not commodity.

Margin tends to be around 30-40% depending on products. Once you deduct everything else they quickly come down to net >10% margin.

Costco thinks that way. Used to be USAA. That’s about it as far as I can think.

Amica (mutual insurance company)

Warren Buffett has become very rich in part because he appreciates the value of goodwill to a business while others ignore it. Here's a summary of what he's written on the topic:

To a business, goodwill is an asset just as real as cash or vehicles. In fact it is often more valuable than fixed assets because it appreciates over time while the latter depreciates. Despite this, it doesn't appear on the traditional Profit and Loss statement so is overlooked by managers whose compensation is based on such an inadequate measure of profit.

> I'm begging to shop there.

Yes.... exactly....

> I came to (Jim Sinegal) once and I said, 'Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends.'

I wonder how much it actually affected their bottom line

Given how much they get in profit off an average shopper, I cannot imagine it did (at least not if 25c extra could fix it).

Costco earns ~2.4% profit, or $4.3B over 105M members, which is ~$40 per member. They barely make the cost of a membership in profit, if that.

Their profit is the membership fee.

It’s less than the membership fee, so my point is that losing 25 cents on each hot dog is a big deal.

But, see, they could lose more by not losing 25 cents on each hot dog. The real question is, if they raised the price of hot dogs, would they make less money, or more? They think the answer is "less". I'm not prepared to say that they're wrong...

Imagine being in the position of the guy explaining they lost the Costco sausage account because they are opening their own plants.

Some of the touristy parts of London used to have (pre-pandemic) all you can eat buffets for around £5.

I’m not stupid - there’s no way good quality food can be provided at that price point so I always stayed away.

Few years ago I watched some exposé where some of these restaurants were caught bleaching chicken that’d gone off and putting food from unfinished plates back into the buffet... they ‘figured it out’ I guess

There is simply no way that is going on with Costco.

When you run up against one constraint, you find a way to alter other potential variables. That’s what we do to keep businesses (and software) humming along, right?

(2020)

or even (2018)

more discussion: https://news.ycombinator.com/item?id=17320605

The polish sausages were better than the hot dogs, but they killed them.

Costco killed the combo pizza so I killed Costco from my shopping trips.

Good to see that even Google removed Costco from their search results when you search for Pizza.

Reply on news.ycombinator.com