retail news in context, analysis with attitude

The Wall Street Journal this morning has a long piece about supermarket rotisserie chickens. The reason? After emerging “ as a supermarket staple in the 1990s, paving the way for the array of prepared foods that grocery stores sell today,” rotisserie chickens now “are many grocery stores’ best-selling hot food item and a rare bright spot in an industry struggling to adapt to a shift away from packaged foods.”

More than 600 million of them were sold in US supermarkets last year, the story says - 87 million of them in Costco alone (which now “is building its own roughly $300 million chicken-processing plant in Nebraska, which should be cheaper than buying ready-to-cook chickens from suppliers.) They are a particularly profitable option because people tend to buy high-margin side dishes and beverages to go along with them.

However, even as “more stores are relying on rotisserie chickens to draw customers,” higher costs and increased competition mean that “to continue selling them for $5 to $7 each, executives are working to trim supply-chain costs, cook chickens more efficiently and throw fewer of them away unsold.”
KC's View:
When I started out writing about the supermarket business, I used to find myself in stores during the early morning, and usually there would be rotisserie chickens already cooking … before that made it easier for the operators. It almost didn’t matter that by the end of the day, they likely would be inedible.

But that’s a long time ago, and retailers have gotten a lot smarter about this side of the business. The food is a lot better, to be sure … and retailers are smart to do whatever they can to make this segment more profitable. My only word of warning would be that they need to keep effectiveness in mind, not just efficiency … because if they don’t, they’ll be back to cooking chickens at 6 am.