The Ikea hot dog isn’t profitable, it’s just another way to get people into the stores. A normal hot dog in the US probably costs more like $5-7 at this point. I get the sense that in Europe food is less expensive compared to people’s average wage than in the US, but I may be off on that, especially with current food price increases.
It is extremely cheap. It’s what business people call a “loss leader.” The idea is to use the absurdly cheap rotisserie chicken as a means to motivate people to come into the store. When you have people in the store, it’s easier to sell them more stuff that you actually make money on.
It seems to be a mix between high volume (“hey this seems cheap, let’s buy lots”, plus Costco doesn’t do small sizes), membership fees (free money plus it incentives customer loyalty), and some additional services they offer like handyman type work and some B2B stuff (services from retailers are always marked up crazy high compared to the physical goods).
Meanwhile in Amerikkka:
Welp, ordinary hot dog in Poland cost around 1,75 dollar, and we earn something around 1/5-1/10 of usians, when we calculate the currencies.
The Ikea hot dog isn’t profitable, it’s just another way to get people into the stores. A normal hot dog in the US probably costs more like $5-7 at this point. I get the sense that in Europe food is less expensive compared to people’s average wage than in the US, but I may be off on that, especially with current food price increases.
Five dollars for a whole rotisserie chicken? That sounds extremely cheap.
It is extremely cheap. It’s what business people call a “loss leader.” The idea is to use the absurdly cheap rotisserie chicken as a means to motivate people to come into the store. When you have people in the store, it’s easier to sell them more stuff that you actually make money on.
What do they make money on then? Furniture?
It seems to be a mix between high volume (“hey this seems cheap, let’s buy lots”, plus Costco doesn’t do small sizes), membership fees (free money plus it incentives customer loyalty), and some additional services they offer like handyman type work and some B2B stuff (services from retailers are always marked up crazy high compared to the physical goods).