"Every time you walk out of Costco with that perfectly golden $4.99 rotisserie chicken, you've just helped them lose money. That's right - Costco's CFO stated in 2015 that Costco loses between $30 to $40 million annually on their famous rotisserie chickens. Yet somehow, this wholesale giant continues to thrive, with net sales reaching $249.6 billion in fiscal 2024. What's going on here?"
"Have you ever wondered why that chicken is always at the very back of the store? There's nothing accidental about it. Every step you take from the entrance to that rotisserie counter is calculated. Along the way, you're passing electronics, clothing, seasonal items, and about a dozen things you didn't know you needed until you saw them. My father, who spent three decades in sales management, used to call this the "journey of justification.""
Costco sets the $4.99 rotisserie chicken below cost, accepting an estimated $30–40 million annual loss, while driving high overall sales ($249.6B fiscal 2024). The chicken functions as an anchor product that brings customers into stores and compels them to traverse aisles of higher-margin items. Strategic placement at the store's rear creates a 'journey of justification' that turns single-item trips into broad purchases. Costco has maintained the $4.99 price since 2009 and invested in vertical integration, including a chicken processing plant in Nebraska, to control costs and preserve the value proposition.
Read at Silicon Canals
Unable to calculate read time
Collection
[
|
...
]