The Surprising Reason Costco’s Rotisserie Chicken Will Never Cost More Than $4.99

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Sometimes you’ve got to lose money to make money
The Surprising Reason Costco’s Rotisserie Chicken Will Never Cost More Than $4.99
The Daily Meal

The Costco rotisserie chicken is an icon, a beacon of light in the giant superstore that so many people love and swear by. Few customers can make a trip to Costco without buying at least one of their famous chickens which, at just $4.99 each, is an unbeatable bargain that is delicious to boot!

But how and why are they sold as such a reasonable price? The truth is Costco actually loses an estimated 30 to 40 million dollars a year by sticking to a $4.99 price point — and they have no intention of raising the price. That may seem crazy, but the reason they do it is actually pretty simple.

Costco uses their well-loved rotisserie chicken to keep customers happy and to increase foot traffic in the stores. After all, how many people can go into a store like Costco, and only buy what they need. It’s almost impossible, right? So, by giving people an incentive (like a delicious, well-seasoned rotisserie chicken), even if it means losing money, they actually end up making more money by luring customers in in the first place.It may seem odd, but setting an item at a price that loses money for the store is actually a fairly common practice for many supermarkets; such items are referred to as "loss leaders."

Something like a tasty, ready-to-eat rotisserie chicken also encourages spontaneous midweek trips to Costco, which could also lead to higher spending by customers. Because Costco is so often associated with buying, customers typically limit their trips per month. Like the Costco food court, the rotisserie chicken helps give shoppers extra incentive to take a trip to Costco in between those bigger shopping excursions. Once they get to the store, they have to walk past almost everything in order to reach the chickens, which are placed in the back of the store, giving them plenty of opportunities to spot something else they want to buy, even if it isn’t on their shopping list!

Though many other supermarkets now price their rotisserie chickens as close to the $4.99 mark as possible in an effort to compete with the Costco rotisserie chicken, loyal fans of the Costco chicken aren’t likely to be swayed, probably because they know these 15 secrets of the $4.99 Costco rotisserie chicken.

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