Costco

The Costco rotisserie chicken costs $4.99, and Costco loses between 30 and $40 million a year selling it. This is not an accident. It is the most deliberate loss leader in retail history. The chicken is placed at the back of the warehouse so that every customer who comes in for a cheap dinner walks past televisions, clothing, and kitchen appliances on the way there. The average Costco member spends over $170 per visit. The chicken cost the company a few dollars in lost margin and made it back 50 times over before the customer reached the checkout. The entire store is engineered around customer psychology. Costco carries roughly 3,800 items. A typical supermarket carries 30,000. Fewer choices means faster decisions, less browsing fatigue, and higher confidence in each purchase. The layout changes regularly so that loyal customers discover something new every visit. Products rotate in and out, rewarding shoppers who act on the spot because the item might not be there next week.