Lawsuit questions Costco's claims its rotisserie chicken has no preservatives

There's a reason millions of people are willing to pay a fee just to walk into a Costcowarehouse club store.

Costco has built its reputation on delivering a wide range of products at prices that feel almost unbeatable.

But it's not just that members are getting a good deal. Rather, they're getting great prices without having to sacrifice quality.

Few items embody that better than Costco's famous $4.99 rotisserie chicken.

The rotisserie chicken has long been a household staple that's synonymous with value, convenience, and consistency. For many shoppers, it's not just dinner, but a reason to visit Costco in the first place.

But a new lawsuit is now putting that trusted image under scrutiny, raising questions about what exactly customers are getting when they pick up a cheap chicken on the go.

Lawsuit targets Costco's "no preservatives" claim

Costco has long been a leader in product quality. Its aim with its rotisserie chicken is to offer up not just a cheap meal, but a wholesome one.

Costco claims that its rotisserie chicken is free of preservatives. But a lawsuit says otherwise.

Costco was sued earlier this year on the basis of its famous rotisserie chicken actually containing two preservatives -- sodium phosphate and carrageenan.

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In response, Costco said, "We use carrageenan and sodium phosphate to support moisture retention, texture, and product consistency during cooking," as The New York Times reported. The company also claimed that "both ingredients are approved by food safety authorities."

Of course, the timing of the lawsuit matters.

Health and Human Services Secretary Robert F. Kennedy has made it clear that he's on a mission to target ultra-processed foods. That's made a lot of people more sensitive to the issue and more mindful of the products they're buying.

Costco, meanwhile, has since removed the "no preservatives" language from its signage in stores as well as online.

Why this Costco lawsuit matters

For a company with vast resources like Costco, a single lawsuit normally wouldn't be a huge point of concern.

The problem is that Costco membership is built on value and trust. Members who pay their annual fee want to be reassured that they're getting quality products in return. So when Costco is called out for misleading consumers, even if unintentionally, the consequences can be significant.

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This particular lawsuit might also sting for Costco because the rotisserie chicken is a popular product the company is known for.

Costco has famously held the price of its rotisserie chicken steady for many years, similar to its iconic food court hot dog and soda combo. If members start to question the chicken, they may start to question other Costco purchases.

The good news is that loyalty to Costco tends to run deep. During the company's most recent earnings call, Costco reported that its membership renewal rate in the U.S. and Canada was an impressive 92.1%.

While bad press from a lawsuit over mislabeled rotisserie chicken isn't great news for Costco, it's also unlikely to spell doom and gloom - as long as it doesn't become a pattern, that is.

If anything, this lawsuit should serve as a wake-up call to Costco. Members expect quality as well as transparency. As such, the company needs to be cautious about even seemingly minor inaccuracies in its product descriptions to avoid long-term backlash.

Maurie Backman owns shares of Costco.

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This story was originally published April 25, 2026 at 7:17 AM.