Costco moves very slowly. In many ways, it treats its membership like a dog that's scared by any sudden movements.
It makes changes on a very deliberate basis and has certain sacred cows it pledges never to change. Some are a little silly, but the company has pledged to never change the price of its famed hot dog and soda combo.
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The warehouse club has charged $1.50 for a hot dog and soda since the early 80s and has promised to keep that price eternally. That deal is important enough to customers that new CFO Gary Millerchip felt the need to reassure members about the price during his first earnings call since joining the company.
“To clear up some recent media speculation, I also want to confirm the $1.50 hot dog price is safe,” said Millerchip, shortly after welcoming attendees to the company’s (third-quarter earnings call.)
To keep the deal in place, Costco (COST) started manufacturing its hot dogs. It has taken similar steps with another low-priced item, its famed rotisserie chicken.
The warehouse club literally bought a chicken farm as a way to take out the middleman so it could keep charging $4.99 for an entire rotisserie chicken. Even doing that likely means that the company loses money on each chicken, but it's a loss leader Costco has been willing to keep in place.
It has, however, made a major change to its beloved rotisserie chicken, and not everyone is happy.
Image source: Shutterstock
Costco makes a major chicken change
For decades, Costco sold its rotisserie chicken in a plastic clamshell. That allowed members to see the entire chicken and pick the one that looked best to them.
The warehouse club, however, recently changed the packaging on its beloved rotisserie chicken. That seemed like a cost-cutting move, but the company said that it made the change for an entirely different reason.
"You may have noticed a classic Costco item in a different container: Kirkland Signature Seasoned Rotisserie Chicken now comes in a bag. Based on projected rotisserie chicken sales in 2024 in the U.S., the new packaging will save an estimated 17 million pounds of plastic every year," the company shared in its Costco Connection magazine.
Costco shared that the new packaging also has other environmental benefits.
"The bag also takes less space to transport; one pallet of the new bags is equivalent to five pallets of the old packaging, so Costco can remove 1,000 of its freight trucks from the road each year. The use of fewer transportation vehicles will eliminate over 4,000 metric tons of carbon dioxide annually," it added.
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Costco customers mixed about chicken packaging
Some Costco customers are not happy about the packaging change and took to social media to complain. Many appear to not buy the environmental reason as why the company made the move.
"Beancounters @Costco trying to discourage the chicken buyers because it's a loser. Costco is becoming just like every other greedy corporation. $ over customer satisfaction" shared @dirich1955 on X, the former Twitter.
A few posters seem to be really overreacting to the change.
"The rotisserie chicken bag scourge has hit my local Costco. Bleak times in America," posted @nakefoul.
Some members, however, don't see this as being an issue worth complaining about.
"It’s been like this for weeks. The chicken is still the same inside," wrote @v_trip_.
Some X posters put the change in a broader perspective.
"The important thing is it’s still $4.99," added @SharkeyShyster.
@jelly_momm agreed with that point and shared some perspective.
"Stopping at Costco to buy a rotisserie chicken bc I have 5$ in my bank account & I gotta feed my kids IDC who complains that their chicken is in a bag. They kept that delicious giant chicken only $4.99," she posted.
One constituency also needs to be asked if they care: investors. Short answer: It doesn't look like it. Costco shares were up 11% in the second quarter, just after the bags were first introduced. The shares, which finished June at $849.99, are up 28.8% for the year.
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