November 2, 2007

 

Cheaper pork and chicken continue to limit beef sales in US cities

 

 

Cheaper pork and poultry continue to limit beef sales in US cities as record large pork supplies and a drop in poultry prices in September caused grocers to promote these items more.

 

Grocers are hoping for active meat sales in the first half of November and are featuring a mix of premium and value-priced cuts to begin the month.

 

Pork prices may be cut further as stores devote more space to ham and turkey in the run-up to the Thanksgiving holidays. However, with record large supplies of pork, stores may implement aggressive pricing to move the product.

 

Grocers are also taking advantage of the cheaper prices they paid for poultry in September by promoting poultry meat more

 

Shoppers typically are willing to spend a little more on food at the beginning of the month, and grocers are trying to boost sales of meat cuts that generate more dollars in sales.

 

Market analysts also said that since promotions during the second half of this month will be geared toward the Thanksgiving holiday with very competitive sales on turkeys, hams and other holiday favorites, grocers are trying to increase their sales of meat and poultry products and generate additional margin now, ahead of the holiday.

 

BEEF

 

Most grocers included at least one premium steak cut in their printed advertisements this week along with a roast item and ground beef. The premium steaks in general were not aggressively priced, to attract more customers to the stores, analysts said. Some supermarket chains did offer whole strips or rib-eyes at lower per-pound prices.

 

Chuck or arm roasts were the most common low-price feature this week in cities included in the Dow Jones Newswires weekly survey.

 

A Midwest-based analyst said large supplies of pork and chicken at cheaper prices are limiting beef sales in the stores as shoppers compare the items and look to stretch their food dollars. However, consumers desire a variety in their diets so they are buying beef as well, but not as much.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.84 a pound, compared with US$3.65 last year (up 5 percent).

 

PORK

 

After actively promoting pork throughout much of October, some grocers elected to offer fewer items from the category this week. There were less mixed chops and spare ribs in the mix. In some cities, grocers did not offer whole boneless loins as aggressively as they had in October.

 

However, market analysts and meat brokers said there may be another round of bargain prices in the weeks ahead for consumers since hog supplies continue to run at record high levels.

 

Preparations for the Thanksgiving holiday, with more meat-case space to be devoted to turkeys and hams, will cut back on the amount available for fresh meats. With pork supplies remaining very large, the product must find its way through the distribution channel to consumers, and to accomplish that may require more aggressive pricing.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.37 per pound, compared with US$2.10 a year ago ( Up 12 percent).

 

POULTRY

 

After wholesale chicken prices fell sharply in September from the late-summer highs, grocers sought to take advantage of the lower prices by featuring more boneless/skinless breasts along with some bone-in breasts and whole birds this week.

 

The US Department of Agriculture Thursday reported boneless/skinless breasts delivered into the northeast US  at about US$1.27 a pound on a weighted average basis. This compares with US$1.73 on Aug. 30 ( a 26-percent drop)

 

The lower chicken prices offered grocers an opportunity to feature the product at more attractive prices this week following several weeks of active pork promotions in October, said Sue Trudell, vice president of EMI Analytics in Ft. Wayne, Ind.

 

More attractive price points on boneless/skinless breasts and whole birds seen this week are expected to result in more tonnage of these products sold, Trudell said. A number of grocers featured the boneless breasts from US$1.99 down to US$1.69 a pound.

 

Trudell predicts that wholesale prices for boneless/skinless chicken breasts could drift down further into the Thanksgiving and Christmas holiday period due to reduced feature activity and expanding production.

 

The USDA's latest egg sets and chicks placed report released Thursday showed that processors boosted egg sets during the week ended Oct. 27 by 5 percent from a year ago.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was US$1.53 a pound, compared with US$1.30 last year, a 17 percent increase.