The birds sit at the far wall of the warehouse, spinning behind glass in a case that empties and refills all day long. Costco sold 157.4 million of them around the world in fiscal year 2025, a figure the company put in front of shareholders at its January 2026 annual meeting. That works out to about 431,000 chickens a day, every one of them $4.99, the same sticker the bird has carried since 2009. The reason the price never moves is not that chicken got cheaper. Costco loses money on the bird on purpose, and then backed a $450 million chicken operation in Nebraska so it could keep losing a little less.
The price was a decision, and Costco has refused to move it
On a 2015 earnings call, then chief financial officer Richard Galanti looked back at the times rivals pushed their rotisserie birds from $4.99 to $5.99 and Costco stayed put. The company was willing to eat, “if you will, $30 to $40 million a year in gross margin by keeping it at $4.99,” he said. “That’s what we do for a living.”
That number is a decade old and the company has never published an updated one. There is no public accounting of what the chicken actually costs Costco now, only the fact that it sells below market and has not kept up with inflation.
The price has sat at $4.99 since 2009. Adjusted for inflation from that year, the chicken would ring up at about $7.50 today.
It is bait, and the back wall is the point
The chicken is a loss leader, a product sold under cost to get bodies through the door. Costco warehouses are not built for walk-by traffic, so the store needs a reason for you to drive out there, and then a reason to walk the entire floor. The rotisserie case is parked at the rear, beside the wine section and the prepared side dishes.
John Longo, a professor at Rutgers Business School, has described the math simply: very few people buy the chicken and leave, and the rest fill their carts with items carrying much better margins on the way there.
The second payoff is the membership itself. The annual fee people pay just to get inside brought in $5.3 billion in fiscal 2025, about half of Costco’s operating income, which lets the markup on what is in the cart stay thin, and a $4.99 chicken is a very loud argument for renewing. The company guards its food court prices the same way. Former CEO Craig Jelinek has recalled what co-founder Jim Sinegal told him about the $1.50 hot dog combo, unchanged since the 1980s: “If you raise the effing hot dog, I will kill you. Figure it out.”
Costco built a chicken plant rather than pay somebody else’s price
Most retailers buy their rotisserie birds. Costco started construction in June 2017 on what became a $450 million complex near Fremont, Nebraska, run by Lincoln Premium Poultry, and built the supply chain from the hatchery forward. It takes in a 400,000 square foot processing plant, a hatchery and a feed mill, and employs more than 1,000 workers.
The plant was built to process 2 million birds a week. At launch it was projected to cover about 40% of Costco’s chicken needs, and state officials put its economic impact at more than $1 billion a year.
The savings from owning the whole process, hatching, feeding, shipping and cooking, was projected at up to 35 cents per bird. That is the entire reason the plant exists. Costco has also invested in high-efficiency ovens and food containers made with less plastic, squeezing pennies at every step so the number on the shelf tag never has to change.
Nebraska, of all places
American broiler production clusters in Georgia, Arkansas and Alabama, where the infrastructure has existed for generations. Nebraska had no broiler industry. It did have corn. At full capacity the operation eats 341,000 bushels of corn and 3,000 metric tons of soybean meal every week, sourced locally, which wipes out the freight cost Southern processors pay to haul Midwestern grain south. Add a looser labor market than the poultry South, and the arithmetic worked.
Around 100 contract growers in Nebraska and western Iowa raise the birds, about 42 days on the farm before they go to the plant.
Growers got 15-year contracts and a promise that below-average flocks would not see their pay cut, which is unusual. Most poultry companies offer short-term deals and rank farmers against each other, docking the bottom performers to pay bonuses to the top ones. The buy-in is heavy either way. A typical four-barn operation runs about $2 million, and one grower planning 12 barns took on about $6 million in loans. Auburn University poultry economist Robert Taylor has argued contracted farmers, who cover their own labor costs, clear closer to $60,000 a year than the $90,000 to $130,000 Costco pitched. A 2022 shareholder lawsuit accused the company of illegal neglect and abandonment of its chickens, bred to grow so fast they could not stand under their own weight; it was dismissed in 2023. Costco has said it plans to run the plant for the next 15 years and beyond.
Four companies had Costco over a barrel
Tyson Foods, Pilgrim’s Pride, Wayne-Sanderson Farms and Perdue control about 57% of U.S. broiler production, up from 32% in 1980, by USDA’s count. When four companies own that much of the market, the buyer does not set the price.
The bigger problem was the shape of the bird. Processors spent years shifting to larger chickens built to be cut up into breasts, thighs, nuggets and strips, which sell for more. Whole birds fell to about 15% of sales by 2019, down from roughly 50% in the 1980s. Costco needs whole chickens of around six pounds, and the industry had stopped prioritizing them.
Feed is the other lever. It accounts for more than half the cost of producing a chicken, and when corn spiked, so did everything downstream. Owning the mill and sitting next to the corn is how you stop that from landing on your shelf tag.
The volume is the whole business model
Costco moved 51 million rotisserie chickens in 2010 and 137 million in 2023, growth of about 8% a year. The fiscal 2025 total of 157.4 million birds works out to 13.1 million a month and close to 472 million pounds of cooked chicken in a single year.
For scale: Americans eat about 9 billion chickens a year. Chicken is also the runaway winner on the American plate, at about 101 pounds per person in 2024 against 59 for beef, 50 for pork and 19 for fish.
Cheap is not the same as bad
Before roasting, each bird is injected with a saltwater solution, an old industry trick that holds moisture in the meat. The cooking method does the rest: whole chickens on a rotating spit, lower and slower than most kitchen methods, with the juices from the upper birds dripping down and basting the ones below.
Freshness is enforced by the clock. A bird gets two hours on the shelf, and anything still sitting there after that comes off.
The strangest part of the deal is that a three-pound cooked Costco chicken costs less than raw chicken sold in the same warehouse.
The expansion Costco walked away from
In December 2025, Lincoln Premium Poultry told growers that Costco would not build Phase 2 in Fremont. The plan had called for a second processing plant, another feed mill, about 500 new producer barns and a consolidation center.
Nebraska Gov. Jim Pillen put it down to construction costs. Buying from outsiders got easier at the same time: Tyson’s chicken segment posted an 8.4% adjusted operating margin in the fourth quarter of 2024, up from 1.8% a year earlier, and corn fell from above $7 a bushel to a projected $4.00 to $4.50.
The company’s leadership also told growers Costco was comfortable with current supply projections and could cover demand from existing partners.
Nothing about that touches the $4.99. The price survived a pandemic, a feed spike, an industry that stopped making the size of bird Costco wants, and a shelved expansion. It is cheap because a company that leans on membership fees decided a long time ago that the chicken is advertising, and advertising is supposed to cost something.
