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Why is a Whole Turkey So Cheap?

Published in Retail Pricing Strategy 3 mins read

Whole turkeys are often remarkably cheap, especially during the holiday season, primarily because major retailers strategically sell them as loss leaders. This means stores intentionally price turkeys at a very low margin, sometimes even below cost, to attract a large influx of customers.

The "Loss Leader" Strategy Explained

A "loss leader" is a pricing strategy where a product is sold at a loss, or at a very low profit margin, to stimulate other profitable sales. For retailers, the turkey serves as a powerful magnet to draw shoppers into their stores. The underlying goal is to encourage these shoppers, once inside, to purchase a wide array of other high-margin items necessary for a holiday feast—ranging from side dishes, desserts, beverages, and decorations to general groceries.

This strategy capitalizes on consumer behavior: people are often willing to travel further or choose a specific store if they believe they are getting an exceptional deal on a key item like a turkey.

How Retailers Benefit from Cheap Turkeys

Retailers employ the loss leader strategy for several key advantages:

  • Increased Foot Traffic: A low-priced turkey acts as a powerful incentive, driving a significant volume of customers through the doors.
  • Higher Basket Size: Once customers are in the store, they typically buy much more than just the turkey. This includes all the trimmings for a holiday meal, which carry higher profit margins.
  • Competitive Advantage: Offering the cheapest turkey can position a store as the go-to destination for holiday shopping, drawing customers away from competitors.
  • Brand Loyalty: A positive shopping experience, starting with a great deal on a turkey, can foster customer loyalty and encourage future visits.

This strategic pricing allows stores to make up for the minimal profit on the turkey through increased sales of complementary products and overall higher purchase volumes. You can learn more about this common retail strategy here.

What It Means for Consumers

For consumers, the loss leader strategy presents a significant opportunity to save money on a central component of their holiday meal.

  • Significant Savings: Shoppers can acquire a whole turkey at an exceptionally low price, easing the burden of holiday expenses.
  • Convenience: The allure of a cheap turkey often encourages one-stop shopping, allowing consumers to purchase all their holiday groceries at a single location.

However, consumers should be mindful to avoid impulse purchases of items they don't truly need, as this is how retailers offset the turkey's low price.

Maximizing Your Savings

To make the most of this retail strategy, consider these tips:

  • Shop Early: Holiday turkey deals often begin weeks before the actual holiday, and popular sizes can sell out quickly.
  • Check Store Ads: Retailers heavily advertise their turkey deals. Compare flyers and online promotions from different stores to find the best price.
  • Compare Unit Prices: Look at the price per pound to ensure you're getting the best value, especially if stores offer different sizes or brands.
  • Stick to Your List: While the turkey is a great deal, have a clear shopping list for other items to avoid overspending on high-margin impulse buys.

The Loss Leader Exchange

The practice of selling whole turkeys cheaply illustrates a classic win-win scenario in retail, where strategic pricing benefits both the seller and the buyer:

Retailer's Goal Consumer's Gain
Attracts Foot Traffic Access to Cheap Turkey
Boosts Overall Sales Convenience & Savings
Builds Brand Loyalty Value for Money

In essence, the cheap whole turkey is a calculated marketing move, a generous invitation from the store designed to make you a loyal customer for all your holiday, and everyday, shopping needs.