# Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs



## MULTIZ321 (May 31, 2015)

Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs - by Brad Tuttle/ Everyday Money/ Shopping/ Money/ Time.com

"Price points are untouchable.

This week, Costco chief financial officer Richard Galanti was asked a deep, open-ended question in an earnings call with analysts. “What is your philosophy on chickens?” asked Meredith Adler, of Barclays.

Rather than prompting a chicken-or-egg discussion—a subject debated for centuries, dating back to the ancient Greek philosophers—the query was more rotisserie in nature. Specifically, Adler was wondering about Costco’s cooked, takeout rotisserie chickens, which have been priced at $4.99 since ancient Greek times, or at least as far back as we can remember. What’s puzzling to some is that rotisserie chickens cost less than uncooked chicken, and that Costco has consistently decided against raising prices on the item even though it easily could...

...Costco reportedly sells more than four times the number of hot dogs sold at all Major League Baseball stadiums combined each year. According to a 2012 documentary on Costco, the chain sells in excess of 300 million hot dogs, pizza slices, and other ready-to-eat items annually..."


Richard


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## MuranoJo (May 31, 2015)

And why is that?  Is it because you are so tired of fighting through the crowds and exhausted and ready for a break when you finally check out?    (Referring to last paragraph in Richard's post above.)


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## falmouth3 (May 31, 2015)

That price is a steal.  They are bigger and less expensive than the local grocery store.  I think I may pick one up today.


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## MichaelColey (May 31, 2015)

It's pretty simple.  They know that if you go in for a $1.50 hot dog combo or a $4.99 rotisserie, you'll probably leave with several hundred dollars of other stuff.  It's rare that we leave Costco (or Sam's) without spending at least $300.


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## Passepartout (May 31, 2015)

And to top that, Costco's chickens (IMO) taste far better than the paltry $7- 3 pounders at my neighborhood grocer's. DW and I regularly get 6-8 meals from one Costco chicken, it's a bargain of the first order.

I suppose our enthusiasm would be tempered if our Costco was one of the giant mega-stores with crowded parking and elbow crunching lines inside, but ours is a manageable size and we have learned to stay away on weekend afternoons.

Frankly, they could give the hot dogs away free and I'd still not take them, but each to their own.

Jim


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## CO skier (May 31, 2015)

The cheapest and best tasting chickens in town is a combination that cannot be beat.

About $500/month of other Costco items follow our chickens out of store.  One time it was an irresistible flat screen TV.

You have to respect a chief financial officer who knows the company's customers and does not pander to the analysts.


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## CO skier (May 31, 2015)

Passepartout said:


> DW and I regularly get 6-8 meals from one Costco chicken, it's a bargain of the first order.



The carcasses also make the best homemade chicken stock.


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## Passepartout (May 31, 2015)

CO skier said:


> The carcasses also make the best homemade chicken stock.



Yup. First meal is some breast slices and a drumstick or wing or two. Then next time it's sort of a reprise of #1 or more slices into sandwiches. Sometimes there is another meal of semi-recognizable bits, then the carcass goes into the stockpot to be simmered for a couple of hours, de-boned and veggies added for a pot of soup. This maybe extended with some noodles or rice- or not.

Gotta love those chickens! You guys made me hungry, so now I know what might pass for dinner tonight.


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## slip (May 31, 2015)

Man, I have to work on my portion control. DW and I routinely get one meal
Out of a Costco chicken.


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## Kal (May 31, 2015)

It's also interesting that you can't purchase packages of hot dogs or the buns in the warehouse store. Of course, how long would it take to consume a pallet of hot dog franks??


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## dioxide45 (May 31, 2015)

Kal said:


> It's also interesting that you can't purchase packages of hot dogs or the buns in the warehouse store. Of course, how long would it take to consume a pallet of hot dog franks??



They do sell the Kirkland Signature 1/4lb Plus hot dog links in their warehouse. It is a big pack, but we vacuum seal two of them in to FoodSaver bags and then freeze them. Though they don't sell the buns in the warehouse.


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## dioxide45 (May 31, 2015)

We have picked up three or four rotisserie chickens since Costco move in less than five minuted from our house. Have the carcasses in the freezer to turn in to stock some day.

One thing I really wish is that there would be more options in their stores for sides to go along with them. From the potato department, they only have mashed and scalloped. Sam's has great twice baked potatoes in the refrigerated cases. I would kinda like something like that or even mac and cheese available that can be heated in the oven to go along with the rotisserie chicken.


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## Zac495 (May 31, 2015)

Costco pays their employees very well and treats them right. And look! They don't need to raise prices to do it. Walmart could learn a thing or 20.


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## CO skier (May 31, 2015)

Chicken Pot Pie
(Serves 4-5)

Vegetable blend:
1 cup sliced carrots
2-3 peeled and diced potatoes
1 cup diced onion or 1 Tbsp. dried onion flakes
1 cup frozen peas, thawed

Spice blend:
1½  teaspoon McCormick Perfect Pinch Rotisserie spice blend
½  rounded teaspoon dried rosemary
1/2 teaspoon garlic salt or regular salt (optional, but recommended)

4 tablespoons butter or vegetable oil
4 tablespoons flour
2 cloves roasted or 1 clove raw garlic, minced (if not using garlic salt)
2 cups chicken broth, divided
1 or 2 tablespoons dry white wine (optional)
1½ cups milk
3 cups diced Chicken (one breast and trimmings from Costco Rotisserie chicken)
1 frozen puff pastry sheet, thawed at room temperature for 45 minutes


1. Cook carrots and potatoes in microwave on high for 5 minutes, stirring every minute.  Add onion (optional – saute separately for a deeper flavor), mix and microwave on high for 2 minutes, stirring well at 1 minute, then add peas.  Reserve.

2. Heat butter or oil in 2.5 liter ovenproof serving dish (oblong Corning bowl).  Whisk in flour and microwave 2 minutes on high, stirring every minute. Add minced garlic and cook on high for 1 minute.  Add spice blend and stir to combine.  Microwave on high for 30 seconds to activate spices.

3.  Whisk in 1 cup chicken broth.  Microwave on high 1-2 minutes until thickened, then whisk in remaining 1 cup of chicken broth and wine.  Microwave on high until boiling (about 2-3 minutes), then add reserved vegetable blend and cook on high for 5 minutes.  Gradually add milk, removing mixture to large, greased ramekins at each individuals’ desired consistency.

4.   Stir in chicken to each ramekin.  

5. Roll out pastry dough and cut out four circles the size of ramekins.  Bake pastry at 400F for 10-15 minutes. (Optional:  Brush pastry with egg wash before baking).

6. Heat ramekins in oven or microwave.  Top with baked pastry cut-outs.


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## MichaelColey (May 31, 2015)

We eat two between the five of us, and usually have just a little left over.


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## BevL (May 31, 2015)

Costco and Walmart are both called the $100 stores - we never get out of either without buying a hundred bucks worth of stuff and that includes when we go in for a hot dog or (here in Canada) to share a poutine.


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## Beaglemom3 (May 31, 2015)

*Loss Leader*

Interesting article in Bloomberg last year:

*Costco Is **Losing on Cheap Chicken, but Kale Margins Are Healthy*


http://www.bloomberg.com/bw/article...s-a-beating-on-cheap-chicken-switches-to-kale


And (2013)

*Costco Stands Behind Its Cheap Rotisserie Chicken Strategy*

http://www.bloomberg.com/bw/article...-behind-its-cheap-rotisserie-chicken-strategy


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## Luanne (May 31, 2015)

Someone told me a few years ago that Costco had the absolute freshest rotisserie chicken (and that was the only place to buy it) due to their high turnover with the product.


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## Ken555 (May 31, 2015)

Thanks, all! I knew there was something I forgot to do this week and that was go to Costco. Of course, I'll pickup a $4.99 chicken while there, too.


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## tante (May 31, 2015)

Now i want to go to costco and get a chicken.


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## Beaglemom3 (May 31, 2015)

tante said:


> Now i want to go to costco and get a chicken.



   Me, too.

   I must have one !


  :hysterical:


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## Kel (May 31, 2015)

I think I'll go get a $300 chicken too.


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## PearlCity (May 31, 2015)

MichaelColey said:


> It's pretty simple.  They know that if you go in for a $1.50 hot dog combo or a $4.99 rotisserie, you'll probably leave with several hundred dollars of other stuff.  It's rare that we leave Costco (or Sam's) without spending at least $300.


The trick is don't grab a cart!


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## davidvel (Jun 1, 2015)

PearlCity said:


> The trick is don't grab a cart!


They thought of this too. They keep them super hot, in the black bottomed package that doesn't cool quickly. Most people can't carry one without burning themselves (or thinking they are).


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## MuranoJo (Jun 1, 2015)

Seriously, we also like their roasted chickens, but don't get them too often.
My sis loves their chicken salad, which is supposedly made from their roasted chicken.  

Re. the kale, one of my favorite items from Costco these days is the double pack of the Sweet Kale-broccoli salad.  

Count us as another couple who don't get out of Costco without dropping $200-300 or so.


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## ronparise (Jun 1, 2015)

BevL said:


> Costco and Walmart are both called the $100 stores - we never get out of either without buying a hundred bucks worth of stuff and that includes when we go in for a hot dog or (here in Canada) to share a poutine.



for us, thats gone up to $200, (including gas)   and as the article says, the chickens help justify the trip across a  toll bridge to get to the store, and the annual membership fee. 

Just last night when I opened the last 6 pack of toilet paper I told my wife "time for a visit to Costco.

One of the first things we do when visiting a different timeshare resort is to look for the nearest costco, to stock up and to buy a chicken. (or is it to buy a chicken, and stock up)


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## funtime (Jun 1, 2015)

It's our favorite Sunday meal.  I only get the rotisserie chickens at Costco because I know they are super fresh.  When you go to the grocery store they may have been sitting under the heat lamp for 6 hours!  We usually get 4 meals from one chicken including chicken on biscuits!  Easy recipe: condensed Campbells's mushroom soup, frozen peas and chicken heated on stove poured over fresh baked buttermilk biscuits from package.


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## LynnW (Jun 2, 2015)

Love their chickens but only pick one up when I have to go there. No way I will make a special trip just to pick up a chicken because it is so busy. Just found out that the three busiest Costco's in the world are as follows.

#1 Singapore
#2 Maui
#3 Calgary South

Lynn


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## rapmarks (Jun 2, 2015)

ronparise said:


> for us, thats gone up to $200, (including gas)   and as the article says, the chickens help justify the trip across a  toll bridge to get to the store, and the annual membership fee.
> 
> Just last night when I opened the last 6 pack of toilet paper I told my wife "time for a visit to Costco.
> 
> One of the first things we do when visiting a different timeshare resort is to look for the nearest costco, to stock up and to buy a chicken. (or is it to buy a chicken, and stock up)



Ron, we need to make a plan to meet at the Costco for lunch!   I take it you go to the one at Gulf Coast Town Center.    Last fall i ran into my neighbors from Wisconsin who winter in Naples there.


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## Passepartout (Jun 2, 2015)

Guess what was for dinner last night? Yup. Costco chicken. Along with the $5 chicken came a case of Deschutes Inversion IPA, and a package of Costco batteries. About $45. Sure beats $200 that a normal Costco trip costs.

Jim


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## Kal (Jun 2, 2015)

Passepartout said:


> Guess what was for dinner last night? Yup. Costco chicken. Along with the $5 chicken came a case of Deschutes Inversion IPA, and a package of Costco batteries....


 
 How did you prepare the batteries?  Saute then serve with Fava Beans and freshly grated Costco parmesan cheese?  YUM!

 You forgot to pick up Costco's best seller.....a pallet of T-paper.


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## Passepartout (Jun 2, 2015)

Kal said:


> How did you prepare the batteries?  Saute then serve with Fava Beans and freshly grated Costco parmesan cheese?  YUM!



Y'Know, they have a good size non-foods section at my Costco. Not everything there is edible- including the batteries.


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## Ken555 (Jun 2, 2015)

I just lost my appetite.


Sent from my iPad


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## carl2591 (Jun 3, 2015)

too bad that chicken is pumped full of growth harmones and spends it life in a small cage.  Unless something else is up with commerical chickens in the stores. 

We buy fresh local chickens from the farmer and the taste is much better than the store bought ones. They are not as big and fattened up as the ones in the store.


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## dioxide45 (Jun 3, 2015)

carl2591 said:


> too bad that chicken is pumped full of growth harmones and spends it life in a small cage.  Unless something else is up with commerical chickens in the stores.
> 
> We buy fresh local chickens from the farmer and the taste is much better than the store bought ones. They are not as big and fattened up as the ones in the store.



This is something that seems to be perpetrated in the media but is not the case. Broiler chickens, the ones that get sent to slaughter for meat (whole chickens, wings, legs, KFC, etc), do not spend their life in small cages. They are usually in large chicken barns of several thousand or tens of thousands of chickens. Are they crowded, sure, but they can move pretty freely. They are usually segregated by gender (pullets and cockerels). From hatch to slaughter, their life is only six weeks. Commercial laying hens on the other hand, are kept in small cages. I believe their useful laying life is one to three years.

Another incorrect statement often mentioned in the media is that chickens are pumped full of growth hormones. That isn't the case. Growth hormones are not permitted for use in poultry in the US and haven't been for half a century.


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## davidvel (Jun 3, 2015)

dioxide45 said:


> This is something that seems to be perpetrated in the media but is not the case. Broiler chickens, the ones that get sent to slaughter for meat (whole chickens, wings, legs, KFC, etc), do not spend their life in small cages. They are usually in large chicken barns of several thousand or tens of thousands of chickens. Are they crowded, sure, but they can move pretty freely. They are usually segregated by gender (pullets and cockerels). From hatch to slaughter, their life is only six weeks. Commercial laying hens on the other hand, are kept in small cages. I believe their useful laying life is one to three years.
> 
> Another incorrect statement often mentioned in the media is that chickens are pumped full of growth hormones. That isn't the case. Growth hormones are not permitted for use in poultry in the US and haven't been for half a century.


But since when did truth or facts matter? For less than a few few decades.


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## tahoeJoe (Jun 4, 2015)

carl2591 said:


> too bad that chicken is pumped full of growth harmones and spends it life in a small cage.  Unless something else is up with commerical chickens in the stores.



Every party has a pooper, that's why we invited you,....party pooper.


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## carl2591 (Jun 4, 2015)

I stand corrected.. PS i was not invited.. i just popped in.. 



tahoeJoe said:


> Every party has a pooper, that's why we invited you,....party pooper.


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## Gaozhen (Jun 5, 2015)

As a couple with no kids (DINKs) people wonder why we have a Costco membership..."how can two of you [eat/use/need] so much stuff?" they ask. Regardless, we can never get out under $200 either!  But, to be fair, we don't have food/supplies piled everywhere either...

But, our pups love when we go and get a chicken, since we use the carcass (bones removed before final version) to cook up some food for them. Tails thump, eyes stare, drool drips, mmmm...chicken...


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## tante (Jun 5, 2015)

Gaozhen said:


> As a couple with no kids (DINKs) people wonder why we have a Costco membership..."how can two of you [eat/use/need] so much stuff?" they ask. Regardless, we can never get out under $200 either!  But, to be fair, we don't have food/supplies piled everywhere either...
> 
> But, our pups love when we go and get a chicken, since we use the carcass (bones removed before final version) to cook up some food for them. Tails thump, eyes stare, drool drips, mmmm...chicken...



We got a vitamix (from Costco) and put the carcas, bones and all, with some water and made a meat smoothie for the dogs that we poured a small amount over their food.

This may have been my worst idea ever. We cleaned doggie diarrhea from the rugs for two days.


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## billymach4 (Jun 6, 2015)

Gross.. Too much info


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## billymach4 (Jun 6, 2015)

Went to Costco last night to pick up 3 eyeglasses from optical 1 for me, and 2 for her. 

Went around shopping and saw a the chicken. Reminded me of this thread so I just had to get my bargain chicken. Got home and ate it. Yummy!

Yes I spent $100.99 when I left the store. Did not include the 
$400 I spent in optical,


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## falmouth3 (Jun 6, 2015)

We always pick up a case of their green ice tea and maybe a case of Snapple.  We're also childless and rarely spend $100.  We usually have the emptiest carts going through checkout. Wish they had an express lane.


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## Passepartout (Jun 6, 2015)

falmouth3 said:


> We usually have the emptiest carts going through checkout. Wish they had an express lane.



Us too. Our Costco used to have self checkout lanes, but they took 'em out. No explanation. It was very handy when you only have a few items and are paying with your Costco AMEX.


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## MichaelColey (Jun 6, 2015)

I don't think they really care to have shoppers just getting a few things.


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## hypnotiq (Jun 8, 2015)

Passepartout said:


> Us too. Our Costco used to have self checkout lanes, but they took 'em out. No explanation. It was very handy when you only have a few items and are paying with your Costco AMEX.



The one out in Covington had express lanes for a little while and I remember when they took them out, I was disappointed.


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## rapmarks (Jun 8, 2015)

we always pick up the 40 bottles of water for under 4 dollars inaddition to a chicken.


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## persia (Jun 9, 2015)

Here in Oz the chicken is AU$6.99 and the hot dog (all pork) AU$1.99, both tremendous deals. Our closest Costco is in Auburn and it is chockablock on the weekends, you can hardly move through the store. Lots of American products that you can't find elsewhere but also Australian ones, I bought a 750 g tub of vegamite saturday. Interestingly the boneless leg of lamb is exactly the same price if you convert the AU$ to US$.


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## Fern Modena (Jun 9, 2015)

My local Costco does not have self checkout, and I don't think it ever did; however my local Sam's Club does.

Silly me, I belong to both. Sam's is much closer, and I use it more often, but Costco has some things Sam's doesns't (and visa versa).

Fern



Passepartout said:


> Us too. Our Costco used to have self checkout lanes, but they took 'em out. No explanation. It was very handy when you only have a few items and are paying with your Costco AMEX.


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## MichaelColey (Jun 9, 2015)

Fern Modena said:


> Silly me, I belong to both. Sam's is much closer, and I use it more often, but Costco has some things Sam's doesns't (and visa versa).


Ditto.  We belong to both primarily for travel (many places only have one or the other).  For most things, either is fine.  For some (mostly meats), we prefer Costco.  There are a few things we prefer Sam's for, but mostly it's just closer.


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## falmouth3 (Jun 9, 2015)

We belong to BJs and Costco.  I sometimes go in just to buy sale items from one or the other and as others have said, they carry different products.


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