I have just purchased a £1.99 chicken and am sure it will be tastey and would have been looked after by people that know what they are doing. Anyway, there cannot be much money in £1.99 chickens what are the margins? £1.99 doesn't buy much wheat, so who is subsidising the promotion?

no one- that poor chicken probably came from a broiler house,  where they don't feed them much, but what they do feed em has a lot of nutrition. as for subsidisation? there  is none, all these damn supermarkets do is barter the price so low the farmer loses profit, instead of gaining any. hence the reason why i try not to buy supermarket chicken (and because the way these chickens are kept should be outlawed). we wouldnt live in a box, why should they? uh oh, got me raving on like a loony, i'll shut my trap now!

nb857:

am sure it will be tastey and would have been looked after by people that know what they are doing.

Two big assertions here.  I'm sure it will be tasty .......... looked after by people who know what they are doing!

You will be correct on both counts. 1 There will be some taste as it is virtually impossible to take all the taste out of anything. 2 They sure know what to do to minimise the cost They do this by maximising numbers per unit of heat, light, space, food, labour and all associated business overheads. 

In addition their techniques and methods of weighing, handling and cleaning out are mechanised by the use of capital, much of it in the case of French Broiler houses, provided by EU grants.

It is even possible that Tesco bought the feed on behalf of the supplier and even paid for the transportation and slaughter and preparation. They could probably get better prices than he could.