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It's a side point, but the costco hotdogs do absolutely turn a profit. $1.50 seems unreasonably low because of how much we're used to paying for food these days, but its hotdogs and a fountain drink, the cost of ingredients is next to nothing.
It still takes way more than a $1.50 to produce the bun, dog and drink. They're selling them for absolutely no profit, and have been even before the recent bout of inflated prices.
Sorry, you're correct - I should have said they do not make a loss on the sales (turn a profit is obviously a bit of a stretch) since they use their existing infrastructure to offset the operational expenses, and the actual ingredient cost is literally pennies per unit.
Yeah, and that's exactly what a "loss leader" is defined by. They make no profit off the hotdog combo itself but the hotdog combo may be enough of an incentive for someone to come to Coscto in the first place and end up buying more shit that does make a profit.