This surprising thing is costing Costco $40 million per year

May 29, 2015, 5:30 PM UTC
Photograph by Frederic J. Brown — AFP/Getty Images

Costco, the cost-saving superstore, said it’s missing out on revenue by keeping its poultry prices low, Consumerist reports.

Costco’s rotisserie chickens are priced at just $4.99. In a recent call with analysts, the company’s chief financial officer Richard Galanti discussed the decision to avoid raising their price.

“I can only tell you what history has shown us: When others were raising their chicken prices from $4.99 to $5.99, we were willing to eat, if you will, $30 to $40 million a year in gross margin by keeping it at $4.99,” he explained. “That’s what we do for a living.”

Costco sold over 76 million chickens last year, but the low price seems to keep customers coming back for more, Consumerist reports. The news comes as an avian flu has been decimating chickens and other birds in the U.S. In fact, prices appear to be on the rise thanks to the deadly disease.

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