Costco's rotisserie chicken: $4.99 since 2009

Costco has sold its rotisserie chicken for $4.99 since 2009

Few things in the American economy have been as stable as Costco's rotisserie chicken: $4.99 since 2009. In the same store, the raw chicken sitting next to it costs $7. The cooked one is cheaper than the raw one. The first reaction is to think it's a mistake; the second, to think it's a strategy.

The most common explanation is that the raw chicken is bigger and of a higher grade, so the comparison isn't fair. But the price of the roasted bird isn't about the raw material. It's the perfect example of a loss leader: the store takes a hit on the chicken so the customer spends $400 on the rest of the cart. The company has acknowledged it without mincing words: they keep it that way on purpose.

The paradox of raw chicken costing more than the roasted one

A whole rotisserie chicken, golden and seasoned, for $4.99. Next to it, the raw one, pale and uncooked, at $7. The roasted bird weighs just over 1.36 kilos, so the price per kilo isn't an absolute bargain either. The mystery dissolves when you look at the full receipt. Some are reminded of the feudal lord who lowered the price of rice during a harsh winter and earned himself a shrine; Costco does the same every day with chicken and tells no one.

The Spanish comparison

In Spain, a rotisserie chicken of similar size doesn't go below 9 euros; raw chicken at Alcampo sells for 3.5 euros a kilo. The gap with the dollar price is enormous. The logic, however, is the same: the loss leader is financed by the rest of the purchase. Cumulative inflation since 2009 hasn't managed to touch Costco's chicken; for now, it's the full receipt that pays the difference.

If cost pressures keep tightening, something will have to give: the size, the price, or the margin on everything else. The most likely outcome is that the chicken stays at $4.99 and the rest of the supermarket adjusts. The chicken, after all, is just the bait.