The economics of Costco rotisserie chicken

I occasionally raise chickens on my small farm. I sell them for $25 each, which barely covers my costs. When looking at the books, I lose money on the operation overall, because I put some of the birds in my own freezer. To make a profit, I cannot afford to eat my own chickens.

Costco and other food retailers creates an unrealistic idea of what good food actually costs. People tell me $25 is too much. I explain my cost structure and the differences in conditions and quality, but it does not seem to make an impact.

Interesting read. I had never realized how much thought goes into the placement of items in Costco, but it makes so much sense. Usually when I go to Costco it's for meats, but I always end up getting a lot more stuff than just meat. Will definitely have to try this $5 chicken sometime.

"Costco’s ex-CEO, Jim Sinegal, was so impassioned about the $1.50 hot dog combo that he once famously told a colleague: 'If you raise [the price of the] effing hot dog, I will kill you.'"

I love this quote. Costco is a great company. In an era of scams, shrinkflation, and degrading quality across the board, it makes me happy to know that at least one company still fights for consumers. I will be a Costco member for years to come.

Hard to imagine loss leader birds are raised in acceptable conditions. The article mentions Costco is being sued over this.

The numbers here are very confusing. The quoted 30-40m in gross margin across ~70m chickens (yearly sales in 2015) is only around $0.50 per chicken, perhaps a little more accounting for decreased sales at higher prices. The quote also doesn't support the claim that they are "probably not" making money, just that they're bringing in less than they could.

Was this article assembled by an AI from a bulleted list of story details? The structure is erratic and some paragraphs are repeated entirely.

tl;dr - it's a loss leader