Interesting read. I had never realized how much thought goes into the placement of items in Costco, but it makes so much sense. Usually when I go to Costco it's for meats, but I always end up getting a lot more stuff than just meat. Will definitely have to try this $5 chicken sometime.
"Costco’s ex-CEO, Jim Sinegal, was so impassioned about the $1.50 hot dog combo that he once famously told a colleague: 'If you raise [the price of the] effing hot dog, I will kill you.'"
I love this quote. Costco is a great company. In an era of scams, shrinkflation, and degrading quality across the board, it makes me happy to know that at least one company still fights for consumers. I will be a Costco member for years to come.
Almost every grocery store/big box/etc. is laid out to direct the customer's experience and maximize the store's profits. 99% of the time I go to Costco with a list that I stick to. The other 1% I end up buying a new TV.
there is an infographic at the top and then abruptly the same exact text at the bottom, took me some time to realize i was reading it again on the same page sigh
I occasionally raise chickens on my small farm. I sell them for $25 each, which barely covers my costs. When looking at the books, I lose money on the operation overall, because I put some of the birds in my own freezer. To make a profit, I cannot afford to eat my own chickens.
Costco and other food retailers creates an unrealistic idea of what good food actually costs. People tell me $25 is too much. I explain my cost structure and the differences in conditions and quality, but it does not seem to make an impact.
Wow, people complain that $25 is too much for a whole chicken? At the grocery, you pay about $3 per pound for butchered chicken. So, I'm guessing a whole bird is about 10 lbs (is that accurate?), which would make your price about $2.50 per pound. Maybe I'm just used to city prices, but that seems very reasonable to me.
Looks I vastly overestimated how much a chicken weighs. We had chickens when I was growing up, but I guess they seem a lot bigger and heavier when you're only three feet tall.
I’m deeply sympathetic. You’re around (not at) the top of the range for small farm organic whole chicken. People should be expecting to pay perhaps half that at the low end. So you have a differentiation/specializing challenge on your hands but any tirekickers expecting $5 should simply not be counted in your potential market.
We had a friend’s whole chicken business fail because she tried to price competitively with the grocery store instead of educating her customers. Those per unit economics don’t have a prayer of making it up in scale under $10 or so.
The numbers here are very confusing. The quoted 30-40m in gross margin across ~70m chickens (yearly sales in 2015) is only around $0.50 per chicken, perhaps a little more accounting for decreased sales at higher prices. The quote also doesn't support the claim that they are "probably not" making money, just that they're bringing in less than they could.
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[ 5.6 ms ] story [ 24.9 ms ] thread"Costco’s ex-CEO, Jim Sinegal, was so impassioned about the $1.50 hot dog combo that he once famously told a colleague: 'If you raise [the price of the] effing hot dog, I will kill you.'"
I love this quote. Costco is a great company. In an era of scams, shrinkflation, and degrading quality across the board, it makes me happy to know that at least one company still fights for consumers. I will be a Costco member for years to come.
Costco and other food retailers creates an unrealistic idea of what good food actually costs. People tell me $25 is too much. I explain my cost structure and the differences in conditions and quality, but it does not seem to make an impact.
We usually eat animals that are "children" or "adolescents", because they are more tender or taste better.
The article mentions that Costco's rotissery chickens are 3lbs.
We had a friend’s whole chicken business fail because she tried to price competitively with the grocery store instead of educating her customers. Those per unit economics don’t have a prayer of making it up in scale under $10 or so.