While the mall food court struggles to survive, Costco thrives

Those who grew up in the suburbs know that no trip to the mall was ever complete without a pit stop to the food court. From kung pao chicken and chow mein to fresh, hot cinnamon rolls and salted pretzels, the food court was sure to satisfy whatever craving your heart desired. 

The appeal behind such foods isn’t necessarily the taste or the quality of ingredients. Rather, it’s the impulsivity and the instant gratification of enjoying something quick, classic and satisfying. As The New York Times put it, food court food “is the food that is available at the moment you want some food.” It’s not the kind of food you’d get dressed up to enjoy, but more the kind of food you’d relish after a long day of walking and shopping. 

That’s why it feels wrong — almost illegal — for malls to be devoid of food courts. After all, the two go hand-in-hand. And much like any iconic duo, if one struggles to stay afloat, then the other is bound to sink to the bottom too. Amid a ruthless pandemic, malls have managed to still stay in business. But the same can’t be said for many food-court mainstays, like Sbarro, Cinnabon, Jamba Juice, and Panda Express, that are hanging on by a thread. Threatening to take their places are swanky sit-down restaurants that are luring more folks (young, old and everyone in between) to come out to their nearby shopping outlets. 

Mall food courts are struggling to survive, there’s no doubt about it. But elsewhere, one food court is managing to do the exact opposite. In fact, it’s been staying strong for years. And it doesn’t look like it’s going out of business anytime soon.

That’s, of course, the one-and-only Costco food court, the beloved addition to the wholesale warehouse. The food courts have gained a cult-like following, notably on Reddit, and even earned mentions on TV shows like “Baskets” and “Modern Family.” There are devoted fans who religiously track new menu items and price hikes. And there are fans who run Costco fan sites and sell Costco-themed swag.

The secret to Costco’s food court popularity seems to be in their signature hot-dog-and-soda combo. The $1.50 offering is “one of the perks that helps persuade shoppers to dish out $60 or $120 for a membership every year,” reported CNN. While the hot-dog itself offers little to no profit for Costco, it’s part of the store’s “broader strategy to distinguish its warehouses.”

Customers line up with social distancing to purchase food at a Costco Wholesale store in San Mateo County, San Francisco Bay Area, the United States, May 21, 2020. (Xinhua/Wu Xiaoling via Getty Images)“Costco finds ways to improve quality while holding prices down on merchandise — TVs to furniture to groceries,” the outlet added. “To stand out against the likes of Amazon, Walmart, Target and Kroger, Costco masters the basics.”

Interestingly, most Costco food courts are placed conveniently near the entrance of stores, thus attracting consumers from the get-go. Those who have stepped into a Costco also know that the food court menu features only a small list of items. Those select few foods are mainly utilized to keep the price of the hot dog steady. This includes switching from 12-ounce soda cans to cheaper, 20-ounce fountain drinks and using cheaper condiments. Costco even built its own chicken plant in Nebraska to combat rising chicken feed prices. This allows the warehouse to produce roughly 100 million rotisserie chickens a year and keep their prices fixed.

At the crux of Costco’s appeal is simplicity. There’s nothing particularly fancy about the wholesale club or its offerings. But consumers keep coming back for more because it’s affordable, especially for the hefty amount of goods they get in return. As explained by CNN, “Costco has thrived in the online shopping era and created a loyal membership base by perfecting the blocking and tackling of retail: Low markups.” Costco is known for selling groceries, personal goods and household essentials in bulk for cheap. That means consumers can purchase a 3-pound tub of pretzels, a 7-pound tub of Nutella, four gallons of mayonnaise and plenty more for less than $20.

The food court is just an incentive for consumers to become loyal Costco members and fulfill all their shopping needs solely at Costco. And thus far, it’s been really successful.

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In recent months, several food court staples have increased in price, all thanks to inflation. The chicken bake — Costco’s breaded delicacy stuffed with strips of chicken breast, bacon, cheese, green onions and Caesar dressing — is ringing up for $1 more at the food court. The individual bakes, which previously cost $2.99, are now priced at $3.99. The price of a 20-ounce fountain drink (with refill) also increased by 10 cents from $0.59 to $0.69. And on store aisles, 40-packs of Kirkland-branded water bottles increased from $1.89 to $4.

But in the midst of rising menu prices, Costco brought back a fan-favorite item to the food court, thus sending shoppers into a frenzy. Parade reported that Costco brought back its popular Berry Smoothie after testing out its not-so-popular Mango Smoothie earlier this summer. The former contains a mixture of strawberry, blackberry and acai with no added sugars, artificial flavors or coloring included. The smoothie is only available at select Costco locations at this time.

Costco’s food court has always put its customers first and in turn, reaped the benefits. At this point, the brand’s hot-dog-and-soda combo isn’t allowed to increase in price, even amid rising food costs. As Costco co-founder Jim Singal infamously told Costco CEO Craig Jelinek in what would go on to become a viral exchange, “If you raise the [price of the] effing hot dog, I will kill you. Figure it out.”