November 27, 2009

 

US Retail Meat: Product mix to entice post-holiday shoppers

 

 

Retail grocers were expected to offer shoppers a mix of meat items after the Thanksgiving Day holiday, but the leaning likely will be toward the red meats.

 

After the poultry-driven holiday meal and a week of eating leftovers, consumers often are ready for a change to red meats. In many years, grocers will jump in with an aggressive beef feature for the first weekend of December.

 

Beef is a favourite of grocers for featuring early in any month because of the increased level of spendable income from those who just got paid for their previous month's work. The first weekend of December adds the element of a rebound from poultry-centred meals.

 

Bruce Longo, beef market analyst at Urner Barry's Yellow Sheet, said grocers have indicated they would like to feature beef aggressively right after the Thanksgiving Day holiday. Since it is the highest-priced meat item in the coolers, beef offers grocers more cash flow per pound of product sold than any other meat.

 

But this year is different, market analysts said. With the economy bouncing along the bottom of the great recession and unemployment running at 10.2 percent, shoppers either don't have the usual money to spend after the holiday or they may be reluctant to step out and buy the more expensive products in the meat case.

 

People are spending big on Thanksgiving, and they may not be ready or able to spend big on regular meals following the holiday, said Jim Kenny, pork market analyst at the Yellow Sheet. Shoppers may want to lean heavily on cheaper cuts.

 

For grocers trying to guess what the shopper will do, will have to have a diversity of meat products in the weekly newspaper supplements, Kenny and others said. The ads, then, can be expected to carry a variety of meat products like lower-priced beef items, a mix of pork products and some chicken items.

 

Wholesale pork prices lately have held steady, which is a bit unusual for this time of the year, Kenny said. This means buyers are laying in inventory for December advertisements, and shoppers likely will see beef loin and butt products through mid-December when the advertising was expected to give way to Christmas products.

 

It was not clear which beef products would be featured in the first weeks after the Thanksgiving Day holiday, but market analysts said lower-priced steaks and roasts would be a good bet. The more expensive roasts and steaks were expected to be reserved for the Christmas and New Year's ads.

 

Up until consumers switched their poultry demand over to turkeys from chicken, retail demand for chicken was good, market analysts said. Wholesale prices held relatively steady over the previous weeks as shoppers picked up more of the cheaper meat and restricted their demand for the more expensive red meats.

 

Going into December, however, the desire to change over to red meats was expected to keep chicken down to an also-ran, the analysts said. Tight supplies at the wholesale level may help hold prices fairly steady, however.

 

The average price of the 15 cuts of beef in the Dow Jones Newswires survey was US$3.78 a pound, compared with US$3.72 a week ago and US$3.98 a year ago.

 

The average price of the 13 cuts of pork in the Dow Jones Newswires survey was US$2.23 per pound, compared with US$2.19 a week ago and US$2.47 a year ago.

 

The average price of the four cuts of chicken in the Dow Jones Newswires survey was $1.48 per pound, compared with US$1.43 a week ago and US$1.46 a year ago.