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The Real Reason Costco Sells Chicken So Cheap

Those who love a bargain love Costco, and those who understand business admire this multi-million corporation and the way it works. This members-only warehouse club is popular around the world. In fact, it is so popular that when this American chain opened its first store in China, it had to postpone its grand opening because the company had not anticipated such traffic, and therefore, was not prepared for the massive crowd that turned up to witness the store’s grand opening.

There is a reason why Costco has become so popular in so many countries in such little time. When it comes to sales, the company does not follow the traditional rules. Most people have been to Costco and yet they do not know the real reason why Costco sells chicken so cheap. Similarly, most people also do not know why the aisles at Costco aren’t labelled. In this video, we tell you some interesting facts about this warehouse club that we are certain you do not know.

You Won’t Believe This Product Is Costco’s Best Seller Item

Costco sells many things but you would be surprised to know that Costco’s most popular product is its toilet paper. The membership-only warehouse club sells toilet rolls worth more than $400 million every year. That’s right — 0.4% of Costco’s total revenue comes from toilet paper sales. In terms of quantities, the company sells close to 1 billion rolls every year. Costco employees even hide toilet paper behind other tempting products to encourage buyers to shop for more than just toilet rolls.

The Warehouse Chain Offers High-Quality Products at Unbelievably Low Prices Under Its Kirkland Signature Brand

Costco’s in-house brand, Kirkland Signature, brings customers quality products at extremely low prices. While this may not be financially feasible for a lot of other players, Costco can pull off these prices as one of the leading retailers in the US. Large volumes make profitability conducive even with the slimmest of margins.

Generally, most products offered under the Kirkland Signature brand are recognized for their quality, but of course, there are some exceptions. For instance, Costco markets excellent wine at reasonable prices under the Kirkland Signature brand, but its toilet paper could be better.

Costco Switched to Visa to Ensure Customers Were Charged a Lower Fee on Purchases

For the longest time, Costco was known to accept only American Express cards. But in 2016, the company switched to Visa, which made sense for many reasons. Visa charges a relatively smaller fee and offers better rewards compared to American Express, which helps customers save on their purchases. More importantly, the number of people who own Visa cards is much higher than those who hold American Express cards.

There Is a Reason Why the Aisles at Costco Aren’t Labelled

Costco adopts many smart strategies to increase its sales. Have you ever thought why the aisles at Costco aren’t labelled? Well, when customers search the store for the things they need, they continuously see other items they may want to put in their cart. However, shopping at Costco is still easy. The warehouse chain stocks up to only 4,000 products in an open layout. On the other hand, its biggest rival Walmart stocks up to 100,000 products in its aisles.

Unlike Most of Its Peers, the Brand Doesn’t Rely on Advertising

A key channel where Costco saves a pretty penny is advertising. Memberships serve a twofold purpose for the company – they provide steady revenue in the form of membership fees, and they create an avenue for returning customers. In the year 2017, 90% of members in the US and Canada renewed their membership with Costco, and membership fees accounted for three-quarters of Costco’s profit. With this strategy, Costco effectively saves money that its peers spend on advertising, thereby keeping its profits high and expenditure low.

Costco Stores Exist Around the World

Americans think Costco is something unique to the country. That’s not the case — Costco stores exist around the world. In 2019, the multinational corporation was operating a total of 776 stores. Of these, 556 stores were located in America and Puerto Rico and 100 were located in Canada. One can find Costco stores in the United Kingdom, Japan, Mexico and even Iceland and China.

Here’s the Real Reason Costco Sells Chicken so Cheap

Costco is the world’s largest retailer of rotisserie chicken and prime beef. There is a reason why the warehouse club sells chicken so cheap. No, the corporation does not run its own chicken farms. Instead, the company uses its chicken rotisserie and hot dog and drink combo to entice people to buy more stuff. The warehouse club hides its popular chicken items in the back and therefore, customers have to go through various products to reach the store’s hot sellers. Even though the price of hot dog and drink combo at Costco has remained the same through the years, this one item wins the corporation millions of extra dollars in sales each year.

However, this warehouse club also deals in super expensive things, such as diamonds. Yes, you can buy diamonds at Costco. We will tell you more about this but later. Meanwhile, if you are enjoying these facts about America’s biggest only-membership warehouse club, do not forget to hit the like button and please subscribe to our channel.

In 2019, Costco Had Nearly 100 Million Members

As of 2019, there were 93 million people with Costco membership. As many of you already know, Costco offers two types of membership: basic Gold Star membership, Business membership and Executive membership. Most of these 93 million Costco cardholders belong to the Gold Star membership category.

There Are Ways You Can Shop for Some of the Best Items at Costco Without a Membership

While Costco offers many great deals, some of the best ones are in alcohol and pharmaceuticals. Costco is one of the cheapest pharmacies in the country and sells prescription medication to non-members as well. In terms of alcohol, about a dozen states prohibit limiting the sale of alcohol by a membership. If your state is one of these, you can walk in without a membership and stock up booze for your next house party. If the door attendant asks, clarify you wish to purchase non-member goods.

It’s an Excellent Place to Work

Employees who work in supermarkets and warehouse clubs do not usually spend a lot of time working in a single place — they switch jobs often. However, Costco has built a name for being one of the best places to work. while retail stores have an average employee turnover rate of 60%, Costco has a turnover rate of only 5%. The company employees close to 250,000 workers worldwide. Within the U.S., the company was employing 163,000 individuals in 2019.

Most Costco workers also get health benefits, which is really important. Approximately 88% of all Costco workers are eligible for 401(k) match, life insurance and dependent care assistance. The company also offers a counseling program as well as a health-care reimbursement account. The employees can also benefit from the employee stock purchasing program.

Costco Also Pays Its Employees Well

There is one more reason why Costco is considered one of the best places to work. The company pays its employees very well. It has recently increased its minimum wage and hourly Costco workers make an average of $22.50 per hour, which is much above the general average. More importantly, Costco is known to promote from within. It is, therefore, not very surprising that the company has such a low turnover rate.

Costco’s Magazine Is Still Popular in Today’s Digital Era

Today, print publications are rapidly becoming a thing of the past. However, Costco Connection, Costco’s monthly print magazine, remains strong with a circulation of around 14.3 million copies per edition. As one of the largest publications in the country, Costco Connection has become popular among businesses seeking a space for traditional advertising, coupons, and interviews.

This Multimillion Corporation Does Not Believe in Building Super Huge Stores

Compared to other warehouse clubs operating the marketing, Costco does not believe in building super big stores. The smallest Costco warehouse is close to 73,000 square feet and their biggest store measures 205,000 square feet. The average store size of Walmart stores is 180,000 square feet and that of Sam’s Club, which is Costco’s biggest rival, is 136,000 square feet.

Along With Being a Retailer, Costco Is as Good as a Pizzeria

Every Costco has a food court, and there are more than 780 Costco stores around the world. Pizza remains a popular item at these food courts, priced at only $2 a slice. Quick math reveals the multinational retailer makes a heck of a lot of pizza every day.

This Warehouse Clubs Chain Even Sells Cars

Not only does Costco sell cars, but it is also among the leading distributors in the country. Costco’s Auto Program has become quite popular, as more and more people are looking to buy cars without the hassle of negotiating the right price. Costco is a trusted third-party in car sales. The company doesn’t directly make any money off the sales; it only generates revenue from the fees dealers pay to participate in the Costco Auto Program.

Costco Customers Not Only Benefit from Cheaper Products but Also Cheaper Gas at Costco Stations

Costco is renowned for savings, which holds true even for the gas you buy at their fuel stations. While gas prices vary from state to state, customers across the country generally save 6-12 cents when fueling up at a Costco station compared to any other local gas station.

Costco Has Rich Customers

While Costco is known for the best deals, its customers in the US are among the top 15% of the country’s population who earn over $100,000 a year. The figure puts Costco shoppers as among the richest compared to other big retailers, such as Walmart and Target.

Costco Pretty Much Sells Everything, from Tissue Paper and Cars to Diamonds

 While Costco is best known as a value-for-money shopping destination, its stores do stock high-value products. One such item that Costco sells is diamonds, and we’re not talking only moderately priced stones. They have some pretty impressive rocks that run into hundreds of thousands of dollars. For instance, in 2019, Costco sold a high-value, large carat diamond for a whopping $600,000. So maybe you can consider adding an item to your shopping list the next time you’re there!

Tiffany Disapproved of Costco Using Its Name to Sell Diamonds

 Tiffany & Co filed a trademark infringement and counterfeiting case against Costco. Costco sold diamond rings with a pronged setting referred to as a ‘Tiffany’ setting. The jewelery giant almost gained $21 million in compensation, but an appeal found Costco not liable.

The American multinational Costco has redefined retail with its unique business model. From jewelery to consumer goods, automobiles, and hot dogs, Costco has emerged a leader in many segments with its jaw-dropping deals and bargains.

Are there other interesting facts about Costco that we missed? If yes, do write to us in the comments; we would love to hear from you. If you liked these facts, don’t forget to like this video and subscribe to our channel. Also, hit the bell icon to stay updated with our latest videos for more interesting facts.

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