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

Rotisserie chickens prepared at Costco in Mountain View, Calif., in 2010 Photograph by Paul Sakuma/AP Photo

Selling a product at or below profit margins to get shoppers in the door—a so-called loss leader—is a retail strategy as old as Thanksgiving turkeys. But it only works if the customers buy other things. At Costco last quarter, many didn’t: Shoppers instead stuck to the cheap groceries, specifically meat, that the giant warehouse club uses to attract them.

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