Costco’s $4.99 rotisserie chicken has become a cornerstone of the retailer’s strategy to maintain customer loyalty despite rising inflation and production costs. Each week, approximately two million birds are processed at Costco’s Nebraska slaughterhouse in Fremont, where they are stunned, prepared, roasted, and shipped to stores worldwide. Since 2009, the price of the rotisserie chicken has remained fixed at $4.99, a price that has defied inflation even as the U.S. retail price of chicken has nearly doubled during that period.

In 2025, Costco sold 157.4 million rotisserie chickens globally, nearly twice the volume of a decade ago. The company is willing to absorb losses on the product to keep customers returning to its stores, many of whom pay membership fees to shop there. Former CFO Richard Galanti estimated in 2015 that Costco was sacrificing $30 million to $40 million annually in gross margin by maintaining the low price point. The rotisserie chicken often serves as a “loss leader,” drawing shoppers deeper into the warehouse to purchase other higher-margin items.

Costco's Nebraska facility, operated by its subsidiary Lincoln Premium Poultry, opened in 2019 at a cost of $500 million and has become a central part of the retailer’s poultry supply chain. The plant contributes to roughly a third of the chickens sold in Costco’s U.S. stores and has helped create a $500 million poultry industry in a region traditionally dominated by cattle farming. The plant also processes other chicken products such as breasts and thighs, priced higher than the rotisserie birds, which helps offset some of the losses.

The Nebraska facility employs around 800 production workers, significantly fewer than competing plants of similar size due to extensive automation. The processing line includes robotic systems for tasks such as trussing the chickens, and the company supports a Trump administration proposal to increase the maximum processing speed by 25 percent to 175 birds per minute, arguing it is necessary to manage labor costs. Critics have expressed concern that higher line speeds could increase injury risks for workers, but Costco representatives have maintained their commitment to safety.

Costco’s vertically integrated approach extends to contracting about 100 farms across eastern Nebraska and western Iowa to raise chickens under long-term agreements. These farms, equipped with specially constructed barns housing 42,000 birds each, produce six flocks per year. The initiative has provided farmers with a new revenue source, while the $18.50 starting hourly wage at the plant is well above the state minimum. A University of Nebraska study found that the slaughterhouse contributes over $1 billion annually to the state’s economy.

However, the expansion of poultry farming and processing has prompted some local resistance, with residents citing concerns about manure and odors associated with large-scale chicken production. Meanwhile, Costco recycles unsold chickens into processed foods like burritos and pot pies, and sells excess grease as biofuel, underscoring the company's efforts to minimize waste in its supply chain.