At the back of Costco’s stores, past the televisions, jewelry, jumbo-sized ketchup jugs and tubs of mixed nuts, is one of the retailer’s most prized items: The rotisserie chicken that costs just $4.99.
Cheap Kirkland Signature rotisserie chickens aren’t only a quick way for families to get dinner on the table. For Costco, the chickens are a lure, pulling customers into stores and getting them to browse the aisles, adding sometimes hundreds of dollars worth of items to their shopping carts before they pick up that bird. The chickens have become almost a cult item. 91 million were sold last year, double the number from a decade earlier. They have their own Facebook page with nearly 13,000 followers.
So Costco is willing to go to extreme lengths to keep its chickens at $4.99. For the past few years, it’s been recruiting farmers for this moment: The official opening of a sprawling, $450 million poultry complex of its very own in Nebraska.
It’s a highly unusual move for one of the world’s largest retailers. Costco will control the production process from farm to store, making key decisions down to the grain chickens eat and the type of eggs hatched. Costco has even put its socially-conscious corporate reputation on the line, fending off local critics who have rallied against the Nebraska operation.
This is a big experiment not only for Costco, but the broader industry as well. Retailers will be watching Costco’s plan closely. It’s one of the largest-scale tests of a store’s ability to become its own meat supplier. And there’s no guarantee it will work.