The company has been losing money on the famously cheap staple item for years, but used it as a way to get customers into the store. "We were willing to eat, if you will, $30 to $40 million a year in gross margin by keeping it at $4.99," said Richard Galanti, Costco's chief financial officer, The Seattle Times reports.
Once it reaches capacity and is fully operational, the 414-acre plant will aim to produce two million chickens a week, which will supply about 40 percent of Costco's needs, NPR reports. The big box store sells approximately 60 million rotisseries chickens a year.
The retailer will need to contract around 100 to 125 farmers to grow the chickens and the plant is estimated to employ 800 people.
The chicken factory follows the same model the store uses for its hot dogs, which are produced at a Costco-owned plant in Tracy, Calif.
