Despite a 16.4% annual increase in chicken prices, rotisserie chickens remain at $4.99 at Costco and BJ’s Wholesale Club. At Sam’s Club, they cost a penny less than that. Meijer is still selling its rotisserie chicken at $5.99, while Giant Eagle has kept it at $6.99 and Publix at $7.39.
There’s a strategy behind these stores’ decision to keep rotisserie chicken prices steady — and that says a lot about how grocers are trying to manage inflation while retaining customers.
Roast chicken is a popular item in supermarkets as it attracts customers to stores. Typically, customers shop around and buy more than just chicken for dinner when they visit.
Companies want to stay competitive on rotisserie chicken prices and are prepared to lose money selling them even if production costs increase. It’s called a “loss leader” for a reason: stores can raise the prices of other goods to make up for those losses.
“Once (customers) are in the store, they can fill the rest of their shopping cart, which the store could make a higher margin on,” said Ernest Baskin, associate professor in the department of food marketing at Saint’s University. -Joseph.
Plus, shoppers know exactly how much their rotisserie chicken meal costs and they’ll notice an increase. Like the price of a gallon of milk or a carton of eggs, the price of a roast chicken helps define consumers’ overall perception of a store’s value. Improper pricing of rotisserie chickens could have far-reaching consequences.
BJ CEO Bob Eddy underscored the importance of this strategy last week: “We have continued to invest in our value proposition. A good example is our signature roast chicken,” he said during a presentation. an earnings call, later adding that even though BJ’s production costs for rotisserie chickens have jumped, the company has kept its prices firm because it’s “such an important thing for our members.”
Also at Giant Eagle, “our rotisserie chicken is a very popular center-of-the-plate dish,” spokesman Dan Donovan said. “We believe it is important to maintain a strong overall value for this item.”
Perhaps no chain is more closely tied to its rotisserie chickens than Costco, which has sold them for $4.99 for more than a decade — and sold 106 million last year. Costco places the chickens in the back of the store, hoping customers pick up the items on impulse as they pass pallets of merchandise en route to the rotisseries.
Keeping rotisserie chicken at $4.99 is such a big strategy for Costco that it built a $450 million poultry processing plant in Nebraska to supply its own poultry to stores. The factory, which opened in 2019, processes more than 100 million chickens a year.
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