Costco is losing its long-time CEO in a leadership shakeup that could put the retailer’s famous $1.50 hot dog and soda combo at risk.
Costco Wholesale Corporation announced Wednesday that company veteran Craig Jelinek would be stepping down as chief executive officer effective January 1, 2024.
Jelinek’s decision to step down is part of a “long-standing succession plan” that will see the company’s current president and COO Ron Vachris transition into the new chief executive role, the announcement said.
According to Costco, Jelinek will stay on with the company through April 2024, serving in an advisory role and assisting Vachris during the transition. He will also remain with the company’s board of directors, helping steer the company’s future trajectory.
“Costco has a very strong culture and a deep bench of management talent,” said Jelinek in a statement. “I have total confidence in Ron and feel that we are fortunate as a Company to have an executive of his caliber to succeed me.”
When Jelinek took over as CEO in 2012, he quickly began exploring ways to accelerate growth for the company. One of his ideas during that time was to raise the price of Costco’s signature hot dog and soda combo. He approached Costco founder and former CEO Jim Sinegal with the idea, but Jelinek was quickly shot down and warned never to alter the price.
“If you raise the [price of the] effing hot dog, I will kill you. Figure it out,” Sinegal reportedly told him.
Since then, Jelinek has done everything in his power to ensure that the combo’s buck-fifty price — a Costco constant since 1985 — remains unchanged.
“We have no plans to take that hot dog above a buck fifty,” Jelinek told Costco shareholders in January 2020. “End of story.”
However, with Jelinek’s departure just around the corner, the decision on whether to maintain Costco’s inflation-proof hotdog price will be in the hands of a new CEO.
While Costco has not specifically said anything about increasing the combo’s price under the new CEO, persistent inflation in the U.S. and a global economic slowdown could prompt the company to explore the idea a bit further.
The Dallas Express requested a statement from Costco about whether Vachris planned to keep that buck-fifty commitment during his time as CEO but did not hear back by the time of publishing.
In addition to revealing the upcoming leadership change, the company also announced a quarterly cash dividend of $1.02 per share, payable on November 17, 2023. Shareholders of record as of the close of business on November 3, 2003, will receive the dividend.
