Loss Leader Strategy

Costco sells rotisserie chickens at $4.99. Each chicken costs more to produce than the selling price. Costco absorbs the difference deliberately. Customers walk in for the chicken and leave with a full trolley. The chicken is a gift to the customer, an act of generosity that builds loyalty and drives overall basket size upward every single visit. The loss leader strategy is brilliant because everyone wins. Customers get genuine value on essential products. The business builds trust and traffic. Walmart prices televisions aggressively, so families get premium entertainment at accessible prices. While browsing, those families discover clothing, home goods, and groceries at competitive margins. Both sides benefit.