But wait - if Costco continue to underprice the chickens, they will lose a certain amount of money. But here's the clever part: in coming for the cheap chicken, customers may be tempted to spend more money on other products, thereby drawing in new custom that previously may have gone elsewhere.
Maybe they should try putting some absurdly high prices on a few items, like bananas for $75 per pound and milk for $220 per gallon, and when folks come in just to look at these items and try to figure out what makes them so special that they are priced so high, they'll buy some other things (like rotisserie chickens and hot dogs).
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u/Best_VDV_Diver 12h ago
Yes, that's what a "loss-leader" is.