Costco sells the world’s best grocery store rotisserie chicken at a budget-friendly cost of only $4.99. How is Costco able to keep the prices so low? It’s because they don’t make a profit—seriously! Psst…do you know these secret shopping perks only available to Costco members?
Here’s why the price of Costco rotisserie chicken won’t change
It’s the same reason why the famous soda and hot dog combo hasn’t budged from $1.50 since the deal was introduced in the early 1980s. Costco could make a giant profit by raising the prices by only $1 (it sold 87 million rotisserie chickens in 2017 alone). But instead, the store keeps the prices low on its famous rotisserie chickens and other staples as an incentive to get shoppers in the door. Check out these other 15 secrets Costco employees won’t tell you.
Costco’s thinking behind the decision
As a warehouse members-only club, the majority of its products are sold in bulk. As such, most shoppers would ordinarily stop by the warehouse once a month or so to stock up on big-batch items. However, low-cost rotisserie chickens help to ensure shoppers visit more often. And, as the rotisserie chickens are typically located in the back of the store, the hope is that customers will fill their carts with other items as they make their way through the aisles.
Costco Chief Financial Officer Richard Galanti explained their business philosophy to The Seattle Times in 2015. “I can only tell you what history has shown us: When others were raising their chicken prices from $4.99 to $5.99, we were willing to eat, if you will, $30 to $40 million a year in gross margin by keeping it at $4.99,” Galanti said. “That’s what we do for a living.”
Perhaps the old saying should be amended: “In this world nothing can be said to be certain, except death, taxes, and $4.99 Costco rotisserie chicken.” Don’t miss these other little-known secrets behind Costco’s rotisserie chicken.