Why Is Costco's Rotisserie Chicken So Cheap?

So why exactly does Costco's four-pound bird cost a paltry sum of $4.99, and why don't they raise the price?

It's their business philosophy—plain and simple. (The company has the same rule about keeping their concession hot dogs and soda at an inflation-ignoring $1.50.) 

Costco CFO Richard Galanti this question in 2015, he responded, "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. That's what we do for a living."

Also, Costco plans to raise 100 million chickens annually, which will supply them with 43 percent of the poultry needed for its rotisserie chicken counter, as well as one-third of the raw birds needed to stock the meat section.

So now you know!

 
 
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