Archive for the ‘Costco’ Category

How many chickens does Costco buy & sell each year?

December 14, 2018

According to CNBC

Costco is shelling out $440 million to open a Nebraska chicken farm.

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Why is Costco doing it?

“To partially escape the American chicken monopoly run by the likes of Tyson, Pilgrim’s Pride and Perdue.”

Technical note to CNBC: A monopoly has only one supplier.  A duopoly has two. When there are three, it’s a concentrated competitive market.

The self-operated farm provide Costco with 100 million chickens … 40 percent of its yearly chicken needs.

Doing the arithmetic, that means that Costco goes through about 250 million chickens every year.

That’s a lot of chickens but pales in comparison to KFC which reportedly goes through 3 or 4 times as many.

Personal note: Many, many years ago, I interviewed for a position at KFC as a chicken buyer. I was recruited because I had an economics degree and had worked for a large grocery store chain.

It wasn’t a good fit. (<= understatement)

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