What The Price Of A Costco Rotisserie Chicken Would Be If It Accounted For Inflation

Costco members love the warehouse store for its quality items, low prices, and ... rotisserie chicken. That's right – Costco sold around 137 million rotisserie chickens in 2023 alone. There are good reasons the rotisserie chicken is such a popular item. Not only are there myriad ways to use rotisserie chicken in the kitchen, making it a dinnertime staple for many households, but it's also an incredible value. It's such a great value, in fact, that you might be wondering why Costco's rotisserie chicken seems to be untouched by inflation.

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If Costco raised its rotisserie chicken prices to account for inflation, you'd be paying approximately $9.33 for that bird in 2024. But as you probably already know, Costco hasn't raised the price – rotisserie chickens have cost $4.99 since the year 2000, except for a short period in 2008 when Costco raised the price by a dollar in response to that year's financial crisis. It bumped the price back down again in 2009, where it's stayed ever since.

Why are Costco's rotisserie chickens so cheap?

Costco isn't banking on a profit from rotisserie chicken sales. Instead, it's banking on the fact that most customers will spend money on other items with higher profit margins when they come in to pick up a chicken.  Costco's rotisserie chickens are what retailers call a "loss leader." Like a doorbuster on Black Friday, a loss leader is a deeply-discounted item on which the retailer is losing money. However, it gets customers in the door, and those customers are likely to spend money on other items while they're there. The same theory applies to Costco's $1.50 hot dogs, which aren't bringing in the big bucks alone.

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That low price also cements the idea that Costco represents a good value. In other words, refusing to succumb to inflation these days will get a brand some seriously good press. In 2015, then-CEO Richard Galanti claimed that Costco was losing $30 to $40 million per year by keeping the chicken prices so low (that number was in 2015, so we can safely assume it would be higher today). Costco knows that low-cost chickens are a strategic move that benefits both the customer and the brand in the long run.

How does Costco keep rotisserie chicken prices so low?

Over the decades, Costco has had to make adjustments to keep the rotisserie chicken prices viable. Have you ever noticed where the chickens are located in the store? They're towards the back, near the wine (which, perhaps not coincidentally, has a 14% margin). Costco intentionally makes it so you have to traverse the warehouse to get your chicken, passing by many must-buy Costco items on your way to the poultry and then back to the checkout.

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The retailer also saves money by producing and processing many of its own chickens at a Costco facility in Nebraska. With this model, Costco is able to better manage expenses and thus pass the savings along to the consumer. Costco has also made changes to its packaging. In 2024, it replaced the recognizable clamshell packaging with a plastic bag in an attempt to save money and meet environmental initiatives. The move from a clamshell to a bag was controversial amongst consumers, but it's saving the brand major money. The bags are less expensive to produce and transport, and savings are expected to be around $97 million dollars per year.

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