Memorial Day often marks the unofficial kickoff to summer in America. While people across the country will celebrate by firing up the grill or taking a dip in the pool, many in New York will flock to one of dozens of beaches, indulging in everything from hot dogs to ice-cold beer.
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Eric Gatoff, CEO of the Nathan’s Famous (NATH) hot-dog brand, is betting he can draw thousands to Coney Island, luring them in with throwback prices.
“We’re rolling back prices to five cents, which is the original price of the hot dog, for about three hours during [Saturday] afternoon,” he said.
The company is celebrating its centennial, and with it comes a host of events including five-cent hot dog day from 11 a.m. to 2 p.m. ET on Saturday May 28, celebrity endorsements from A-list actors including Whoopi Goldberg and Regis Philbin, ultimate-fan surprises, and a special website that allows users to explore a virtual Nathan’s world and opportunities for rewards off of specially-packaged products.
The brand has a storied past with New York City and its love-affair with the grab-and-go meat. Nathan’s was founded by Polish immigrant Nathan Handwerker. He opened his first hot-dog stand, selling dogs for five cents. The price was a 50% discount from his competition and former employer, Feltman’s German Gardens.
"In my house, at 12 years old, you’re no longer allowed to put ketchup on a hot dog."
Handwerker took a $300 loan and his wife Ida’s spice recipe, which is still a secret to this day, and began hawking dogs to customers in the summer of 1916 at the corner of Surf and Stillwell avenues in Brooklyn. The flagship Nathan’s Famous still occupies that spot today, and the company sells upwards of 500 million hot dogs each year in more than 53,000 retail and foodservice locations.
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Over the years, though, the competition for hot dogs has grown as big names like Shake Shack (SHAK) and Burger King (QSR) have entered the market. But Gatoff said it hasn’t been a problem for his company – in fact, he said it’s helped raise awareness of the humble hot dog in the fast-food scene.
“I think it’s a benefit for us that other people are promoting a hot dog as a center-of-the-plate protein,” he said. “We’ve done well. The more Burger King has promoted on TV, the more our sales have gone up.”
In the last year, Nathan’s Famous has seen its stock price rise about 7% to trade around the $44.50 mark. The company's sales, as of its last fiscal year ended March 2015, nearly doubled from $56.41 million in 2011 to $99.11 million in 2015, according to a filing with the Securities and Exchange Commission.
Burger King launched its hot dog offering back in February; Nathan’s is expected to release figures on sales from that quarter on June 6, according to FactSet.
Gatoff attributes the strong Nathan’s brand recognition partly to nostalgia, saying customers connect to it emotionally as opposed to seeing the hot dog as just something to eat when they’re hungry.
“Eating our hot dogs brings back memories of the first time they went to Coney Island, or an amusement park, or to a ball game or barbeque,” he said. “That emotional connection has allowed us to remain strong for 100 years.”
Though Gatoff welcomes customers from all walks of life and all corners of the world…there’s one move that’ll spoil the fun – and it’s a big faux pas especially in New York: Adding ketchup to the hot dog.
“In my house, at 12 years old, you’re no longer allowed to put ketchup on a hot dog,” he said with a laugh.
The right way? Dress your dog with a squirt of mustard, and a line of sauerkraut.