Chicken wars: Costco takes on Tyson and Pilgrim's Pride
Jan 9, 2019
Costco warehouse club, home of the $4.99 rotisserie chicken, will open a chicken farming operation in Nebraska this fall -- sending a message it's taking on two chicken-processing companies with big presences in the ArkLaTex that have been major suppliers to the retailer.
The hatchery-to-processing-plant operation will provide Costco with 40 percent of its yearly chicken needs. In doing so, the company is saying it wants to partially escape the chicken monopoly run by companies like Tyson and Pilgrim's Pride.
Costco, the second largest retailer after Walmart, sells the $4.99 rotisserie chickens at a loss, using them as a way to get customers into the stores and buy other items.
Costco said it sells about 60 million rotisserie chickens a year, at a loss in the tens of millions of dollars. Having its own operation will provide "chickens it won't have to buy from Tyson and (processor) Perdue," said the company.
Tyson, headquartered in Northwest Arkansas, has hatcheries and processing plants around the ArkLaTex. Pilgrim's Pride...