When it comes to rustling up a quick feed for a hungry family, Woolworths' country style hot roast chickens remain a highly affordable meal option despite a recent price hike to $12.
In fact, there's even been some suggestion that a roast chook from Woolies or Coles is such good value the retailers must be losing money on each sale. After all, as Perth's McKenna brothers pointed out in The MacPack podcast this week, a lot goes into getting each chook onto a supermarket shelf.
"In order to get the chicken there, you've got overheads that include farming the chicken, feeding it, pumping it full of probably hormones," Jake McKenna said.
"Then unfortunately, you have to prepare it to be killed," he continued. "Then it goes into Woolies. They bag it, they put the nice stuffing and stuff on it, then they put it under the nice warm lamp. How the f**k are they making a profit?" he asks in a clip of the podcast shared on TikTok that's gone viral.
Speaking to Yahoo News Australia, a spokesperson for the Australian Chicken Meat Federation said Australian chickens are not given hormones, explaining that their size occurs due to selective breeding and optimal nutrition. This process allows chickens to be raised to a large size fast enough that some poultry farms can supply hundreds of thousands of the birds to processors every month.
Chickens sold for next to nothing
Mr McKenna hints that one reason roast chickens at Woolies are so cheap is because they're sold by farmers at very low prices. "How much is a chicken's life worth? It can't be much," he pondered. According to research by University of New England (UNE), his assumption is correct.
UNE organisation Poultry Hub Australia found that some farmers sell chooks for under a dollar each to processing companies, who then supply them to retailers at an unknown price. "Contract growers are paid a growing fee, which currently varies from 59-73 cents per bird," the Poultry Hub Australia website states.
Woolworths cheap chook theory
On the topic of supermarket pricing, people who viewed the video overwhelmingly agreed Woolworths roast chickens are priced suspiciously. "Fun fact: they make about 10c profit on a chook. They're there to get people into the store to buy other things," one viewer commented.
"It's either a tiny profit OR a loss leader," another agreed, referring to the practice of selling popular items at a loss to attract customers, who will hopefully fill their trolleys with other products that will turn a profit.
In a statement to Yahoo, a spokesperson for Woolworths didn't respond to speculation about loss leading or profits made from chook sales directly. "Our roast chickens are hugely popular and are an important part of the range we provide to customers," the spokesperson said.
Hot roast chickens are a known loss leader in other countries like the US, where discount supermarket chain Costco famously sells them for under $7.50 (USD 4.99), even amid inflation and supply chain issues.
Loss leader pricing
Dr Christine Anthony, an expert on consumer behaviour and lecturer at the University of Sydney Business School, confirmed to Yahoo that loss leading is a common business tactic.
"Retailers don't expect to profit off these popular items," she explained. "Instead, by pricing these favourites at record low prices, retailers can get more feet through their doors, with the hope that consumers will make other purchases and impulse buys along the way, increasing their overall profit margin."
"So while the roast chicken alone might not add much to retailers' profits, the bread rolls, coleslaw and after-dinner treats purchased alongside the prized bird certainly add up. These low-priced products also tend to be placed at the back of the store," Dr Anthony said.
"This way a range of other products can grab consumers' attention – and hopefully their back pocket – as they make their way through the store. So next time you see hot chicken on sale, get ready to do the chicken run!"
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