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Inflation Hedge

Inflation Hedge

| July 18, 2022
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If it made up the majority of the Labor Department’s “CPI basket”, the rate of inflation would currently be…zero.  We’re talking about the ever-reliable $1.50 Costco hot dog combo, priced at $1.50 when introduced in 1985 and unchanged since then.  Before Craig Jelinek became CEO of Costco in 2012, he suggested to then-CEO Jim Sinegal that the retailer raise the price of its hot dog combo as they were losing money on it.  According to Jelinek, Sinegal said, “if you raise [the price of] the effing hot dog, I will kill you.”  Had the Costco hot dog combo just kept pace with inflation, it would now cost about $4.13!  (Chart from thehustle.co)

Jeffrey Cerny

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