Costco reportedly lost $40M on their rotisserie chickens in 2015. This is known as a "loss leader" (along with other items such as their $1.50 hot dogs).Loss leaders are items sold for less than what they're worth in order to attract customers. But what's unclear is whether they meant that they actually lose money on the chickens, or they lose out on potentially $40,000,000 moreby charging $6 per chicken instead.Despite all this, Costco probably doesn't care if they lose money on chicken or their food court. Why? Because most of their profit comes from membership fees, which accounted for $4.6B of their $6.3B of profit last year. That means the $40M loss in chicken only accounted for 0.6% of their total profit.That "loss" brings in way more profit for them.This is a loss leader at it's finest.
I've also heard it said that the $1.50 hot dogs are a powerful primer as much as they are a loss leader. It's less about going to Costco to get the cheap hot dogs as much as it is a way to set in the minds of consumers that Costco has resisted raising prices on the hot dogs for decades, and that must surely extend to the reasonable prices of the rest of the goods.
Head of Marketing | Techie by Day, Farmer by Night🤠 | Demand Gen/Growth | Marketing Operations | B2B SaaS
3mo
Great example as not everything needs to be squeezed for maximum juice (especially given the current economic climate). I initially was grossed out at your post because growing up my parents loved picking up those chickens as it was an easy meal...there was just something about the taste and skin that I didn't like.🤢 To this day they'll give me a hard time and say "want to come over for dinner, we're having your favorite?" and I'll be like, "you're at Costco aren't you..."
CEO @ Opre | Objective AI performance reviews that help you coach your team.
3mo
The $4 Costco Chicken Bake 🤤
I too lose about $40m a year on their Rotisserie chickens
Consulting and V.o.C. research in b2b markets leading to insight and actionable strategies and tactics. Providing marketing research for b2b. This makes market research actionable and enables better business decisions
3mo
Marketing wanted to9ncrease price of hot dogs. CEOsaid absolutely not
Got my head in the cloud: The Business Spend Management (BSM) cloud
3mo
Funny, I just picked up one of these “losers” today. Costco’s loss is my gain. Winner winner chicken dinner!
No more previous content
No more next content
Fwiw. Thankful for them. Those chickens are tasty. Great for a low effort family dinner. :)
I’d have to imagine it’s a loss in potential profits not and actual loss… but it could be. Just like advertising is a loss.
Absolutely! Loss leaders attract shoppers who will always need more than a chicken, or bottled water, or hotdogs. Everyone truly wins.
CHEQ | Go-to-Market Security | Fighting the Fake Web!
3mo
Costco hot dogs... the best dawgs in town!
To view or add a comment, sign in
More Relevant Posts
-
Inflation has touched nearly everything these last few years — even Trader Joe’s 19-cent bananas. But Costco is holding the line on its hot dog-soda combo price.Costco’s hot dog deal, sold at its food courts, is still priced at $1.50 — exactly what it cost in 1985, before the Great Recession, the housing crisis, the pandemic and the latest bout of decades-high inflation.If Costco’s hot dog deal kept pace with inflation, it would be three times as expensive today — nearly $4.50. But Costco’s $1.50 combo is a strategic decision, known as a loss-leader: The company is willing to lose money selling the hot dogs at that price — inflation be darned — so long as it helps Costco draw in and retain customers.
Why Costco's hot dog is still $1.50 when everything has gotten so expensive | CNN Business
To view or add a comment, sign in
-
Pls s/s.Why is Loblaw deleting comments instead of sharing a plan to stop selling eggs from caged hens, as you promised to do?I thought Loblaw cared about your customers. Why are you blocking people from asking questions instead of being transparent about your plans to stop selling eggs from hens confined in cages.Loblaw keeps reporting high profits. Why aren’t you using those profits to fulfill your promise to stop selling eggs from hens confined in tiny cages?Please do what you promised and stop selling eggs from hens confined in cages.https://lnkd.in/gfuhBitc
Ampex Brands
facebook.com
To view or add a comment, sign in
-
🛒 Waitrose & Partners has cut the price of bread, beef mince, chicken and other kitchen staples as the supermarket battles to recover from an IT meltdown that caused widespread empty shelves.The grocer is slashing the cost of hundreds of items for the second time this year, after pledging to spend £100m on making its prices more affordable.Many of the 200 items becoming cheaper today are part of the supermarket’s “essentials” range, including:🍯 Jars of honey that will go from £2.60 to £2.35🥩 Pork chops that will fall from £4.25 to £3.75🐄 Beef mince, dropping from £3.55 to £3.15The latest price cuts come after the #supermarket has been battling a flood of customer complaints, following a botched IT upgrade that caused havoc with its stocking system and resulted in empty shelves at many outlets.Read more about the price cuts here 👇https://lnkd.in/exMht27i#shopping #waitrose
Waitrose cuts prices of hundreds of products after IT meltdown
telegraph.co.uk
To view or add a comment, sign in
-
I went to the Grocery store last night and purchased 2 meals for 2 people and some basic's. the total of the purchased items where $113.84 (no steaks or roast or anything fancy) burger and chicken bread mile etc.. ------------------------------------------------------------------------------------Food has been at the center of the economic pressure points. Across all food categories, prices have gone up around 25% since 2020. Beef prices, for examples, are at record highs, with the price of ground beef topping $5 a pound, up more than a dollar over the past three years. The price for a gallon of milk, currently averaging just under $4, has ticked down in recent months but is still 20% higher than before the pandemic. The price of a loaf of white bread is up nearly 50% to $2 //// “You used to be able to get five bags of groceries for $50, now you only get one bag for $50,”/// WIC program administrators are worried their budget for next year won’t keep up with the growing need they are seeing, with enrollmentincreasingby around 300,000 people in 2023 to a record 6.7 million participants.-------------------------------------------------------------------------------------This is a tragedy The manufactures and Corp. owned farms did the same thing in 2006, packaging got smaller and prices went up never returned to "Normal" I do understand wages go up and some cost increase is expected but the above information you can not justify.Between Corp. greed and paralyzed Gov. officials who are unwilling and can not see outside their wealth and the next election cycle we are doomed.I also cant help but thing the the hemorrhaging at our southern borderis escalating the crisis. AMERICA NEEDS TO WAKE UP AND MAKE CHANGES IN OUR GOVERNMENT
To view or add a comment, sign in
-
Host of Chatter that Matters | 3 X Hall of Fame Inductee - Branding, Advertising, Small Business Champion, Conference Speaker/Host/Moderator
You want to keep your Aces close to your chest and away from the rest when you hold them. So, it doesn’t surprise me that Loblaw Companies Limited and Walmart Canada don’t want to sign the Grocery Code of Conduct. The premise behind the Code Of Conduct is to level the playing field from farm to plate. Farmers, manufacturers, independent grocery stores and smaller chains will all have a fair chance versus always having to take a fighting stance with the two dominant players. Loblaw and Walmart say their reluctance is on behalf of the consumer. If they sign it, they lose their ability to keep the manufacturers in check and prevent them from ramming through higher prices. I suggest that half of this is true. To keep manufacturers in check and their aces firmly in hand.Where this gets interesting is that the Food, Health & Consumer Products of Canada FHCP Association, representing manufacturers and the Canadian Federation of Independent Grocers, are working together to get this signed. Retail Council of Canada is more challenging as it represents all retailers. What do I think will happen?This is perfect fodder for politicians who want to blame inflation on others. Last week, they were screaming for more foreign competition. They would love to say they strong-armed Loblaw and Walmart into signing. This is also an opportunity for the entire supply chain to come together to cast a positive halo on all they are doing to create food security and, by doing so, position us versus them. That is my food for thought. And yours?Michael Graydon Tom Shurrie Laura Collaton Gary Sands Nancy Kwon Diane J. Brisebois Wendy Baker Anthony Longo Sandra Sanderson Jamie Nelson Heidi Ferriman Darrell Jones Michael Medline Dr. Sylvain Charlebois Iain McRuvie Liz Cairns Shaun McKenna Ross Robertson Anne Kothawala Erin Rooney, C. Dir. Errol Cerit, P.Eng. Rob Clarke Jim Slomka Stephanie Bonk Mathieu Robitaille Kate Crawford Monique Marozzo D'Arcy Finley Jonathan McCain Kate Beresford Claire McRonald Gary Wade Naniss Gadel-Rab Scott Lorimer Richard Glover #chatterthatmatters #podcast #grocery #codeofconduct #brand
Fate of Canada's first grocery code of conduct in doubt with 2 big players on the fence
financialpost.com
To view or add a comment, sign in
-
THE parent company of Co Down artisan food manufacturer Finnebrogue has revealed that sales in the year to February soared by 22 per cent from £119.3 million to £145.3 million.Click the link below to read the full article ⬇Gary McDonald Finnebrogue#down #foodmanufacturing #finnebrogue #sales
Sales soar to £145m at Finnebrogue owner as company lands Asda festive deal
irishnews.com
To view or add a comment, sign in
-
Years of food inflation has left many consumers looking for value.Many are running to value chains, like Aldi, and the Dollar channel to make their dollar stretch further.Connect with your peers to learn more about how retailer choice is impacting product selection and sales trends at a Peer Group.#peergroups #ALDI #grocery
Rising Food Prices Send More Shoppers to Aldi
wsj.com
To view or add a comment, sign in
-
Protect Your Business with Expert Franchise Reviews | Streamline Your International Trade Compliance Efforts| Get Professional Advice on Regulating Your Growing Franchise System
Ever heard of a pizza scam? 🍕 Picture this: a trusted, long-term manager quietly milking a restaurant chain's loyalty program. That's exactly what happened at Mancino's Pizza & Grinders. James Lake, the misguided GM, pocketed a whopping $130,000 through his intricate scheme! 💰 Lake cleverly reclassified cash transactions as earned rewards, lifting the hard-earned cash straight from the till. For an impressive four years, he enjoyed his ill-gotten gains, all while maintaining a spotless facade.🎭 A perplexing pattern finally sparked owners' suspicions. One pizzeria was giving out too many freebies, compared to the other. A quick investigation revealed that 99% of these free rewards came from one computer - guess whose desk that sat on? 💻 Lake admitted his guilt in a plea bargain, after spending three decades - yes, THIRTY years - in the company.🕰 Beware! This story comes as a hard-hitting reminder that as loyalty programs proliferate across the restaurant industry, there's a need for stringent checks and balances. While these programs are great for fostering repeat business and personalized marketing, they can also be misused, if not adequately monitored.⚖🔍 How do you plan to safeguard your business against such misadventures? Share your thoughts! 💭 #franchise #restaurants #fraud
To view or add a comment, sign in
-
Independent grocers like Fiesta Farms are fighting to make food affordable for customers but it's not easy. Fiesta can’t compete on volume like the big grocery chains the Federal Government is forcing to use their buying power to lower prices. When you shop at Fiesta, you're supporting a family-run business that cares about the people - customers, producers, partners, and the community. A human-scale business that operates based on relationships. Hypenotic started working with FF when we paged the store’s Founder, Joe Virgona, down to the cash register 15 years ago and we're still working with them today. Walk Fiesta's aisles and count the small, local, independent businesses they choose to stock - but they need your support. If you're in a position to shop at Fiesta Farms, or if you can choose to buy less from a grocer supporting things you care about, that choice makes a big difference. Thanks for speaking up, Mr. Fufaro. #indiebrands #grocery #foodsecurity #toronto #localbusiness #communityhttps://lnkd.in/gBDEAMf8
There is little room for negotiating prices anymore: independent grocer
bnnbloomberg.ca
To view or add a comment, sign in
-
Senior Marketing Manager at H.P. Hood LLC | Strategic Alliances | CPG | Branding | National Promotions
Kroger, Giant Eagle and other grocers expand prepared meals; Chipotle, Taco Bell and other restaurants aim to defend their turf.Supermarkets and restaurants are ramping up their tug of war for Americans’ stretched food budgets. Inflation has upended the typical economic dynamic between eating at home versus going out. Grocery pricesincreased at a faster rate than restaurantsin 2022——a phenomenon that hadn’t occurred in decades——until it flipped in March. The price gap has since widened, with grocery prices rising 3.6% while restaurant prices increased by 7.1% in July compared with the same month a year earlier, according to the Labor Department. Overall food prices have moderated in recent months as inflation has eased. U.S. consumers’ budgets remain under pressure. The federal government reducedfood-stamp benefits in Marchthat it had increased earlier in the pandemic. People have been buying cheaper items and fewer products at supermarkets, executives have said, and they are eating out at restaurants less often, or ordering less when they do visit. #groceryindustry Chris Turner Heather Haddon Jaewon Kang Brian Niccol #chipotle Sally Lyons Wyatt Circana Colleen Kirby O'Donnell Rick Belber
Restaurants and Supermarkets Are Brawling Over Your Dollar
wsj.com
To view or add a comment, sign in