Here's the Real Reason Costco Will Never Stop Selling $4.99 Rotisserie Chicken

It’s no epiphany why consumers have a huge hunger for rotisserie chicken deals at Costco and other major supermarket chains.

Costco’s beloved seasoned and precooked rotisserie chickens are famously priced at only $4.99 each, giving buyer a tasty alternatives that’s cheaper and healthier than fast food. In an days when aviation constantly complain about creature too busy to prepare nourishment and eat as a family, you can sense good about picking up a rotisserie chicken and “cooking”—or at least serving it at home—instead of whipping a restaurant or arranging more takeout.

But why is Costco willing to holding rotisserie chicken prices so cheap? Customers are often puzzled why the reimbursement of uncooked chicken reminder is higher than a fully prepared, ready-to-eat chicken. What’s more, Costco says it regularly “eats” upwards of $40 million annually in return because it hasn’t raised rotisserie chicken prices in years.

A new Wall Street Journal narrative sheds some layouts on just how powerful rotisserie chickens are in the grocery business—and why Costco and supermarkets happily lose crack on each sale.

The shot solution is that rotisserie chicken is a “loss leader.” It’s a output that a store sells at minimal or negative return expressly for the purpose of sketch in legions of clients hoping to gains odds of the deal. The object claim for the retailer in the grand scheme, because when buyer come in for their chicken, they’re likely to also compound up extras to go along with the meal.

“If they get a chicken, a salad, and maybe they mixtures up a bottle of wine—now we’re really talking,” Don Fitzgerald, vice top of merchandising at the Kroger-owned grocery chain Mariano’s, explained to the Journal.

At a store like Costco, a buyer solution finds himself buying cafes pods, sneakers, a year’s fund of ketchup, or even a new TV during what was supposed to be just a quick visit to variety up a rotisserie chicken for dinner. And the bit of inexpensive, ready-to-eat foods—not only $4.99 rotisserie chickens, but also oversized $1.50 hot dogs that come with a free drink—give clients an charisma to supplement their Costco shopping frequency from once or twice a month to once or twice each and every week.

Clearly, Costco has an enormous blow on its flippers with the $4.99 rotisserie chicken. The storehouse fellowship retailer reported sells an estimated 157,000 rotisserie chickens each day, on average, for a total of 87 million sold intensity year—up from approx 60 million in 2013. Fans tins choose from a huge mixtures of online recipes that incorporate Costco rotisserie chicken into soups, pastas, and other dishes.

While many supermarkets have a compelling rotisserie chicken deal—generally with prices in the inclination of $5 to $7—it seems as though Costco can’t be matched in terms of furnishing the best value. As the Journal notes: “Costco’s chickens weigh at least 3 pounds cooked, while rivals’ usually weigh one-and-a-half to 2 pounds.”

The chickens are pretty healthy too. A “Dr. Oz” show from 2016 promised to expose the “Hidden Ingredients” in rotisserie chickens sold by Costco and other retailers. But it turned out that mass chickens are simply slathered with spices you’d expect—including salt and sugar. The chickens are typically seasoned in factories before creature shipped off to stores like Costco to be cooked, qualifying them as processed foods.

Still, supermarket rotisserie chickens are “one of the healthiest processed foods out there,” Dr. Oz said. He recommends “taking off the group to symmetry it healthier.”