Costco sold 157.4 million rotisserie chickens worldwide last year — almost double the number sold a decade ago.

The birds, roasted in ovens at the rear of the retail giant's hundreds of cavernous stores, have been priced at just $4.99 since 2009, even as the US retail price of chicken has nearly doubled over that period.

"It's $4.99 and for Costco members, that's one fantastic deal. I don't think you can produce it for that," said Walt Shafer, who oversaw the construction and management of Costco's Nebraska chicken processing site before retiring from the company this year.

The rotisserie chicken has become a textbook "loss leader," reinforcing the loyalty of Costco customers, who pay membership fees for the right to shop at the warehouse clubs. The model is unusual in US retail: rather than squeezing suppliers on price alone, Costco has taken ownership of part of its supply chain to protect a single fixed-price item, betting that the traffic and trust it generates across the rest of the warehouse more than justify the cost.

Costco backs the product with its own processing operations in Nebraska. Rotisserie birds account for only a portion of the chicken processed at the plant, which also cuts breasts, thighs, and other parts delivered to stores in six-pouch "saddle packs." Raw breast meat sells for $2.99 a pound, helping offset the losses incurred on rotisserie chicken.

The strategy has drawn attention from policymakers as well: Costco executives have been called before Congress over the years to explain the price, and the company has said it views the chicken as central to its brand promise of value. Whether the $4.99 price holds as feed, labor, and processing costs continue to rise remains one of the most watched pricing decisions in American retail.

The original reporting is by Gregory Meyer at the Financial Times, spotted via Mike Rosenwald and shared by Marginal Revolution.