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Despite consumers’ pronounced penchant for trading down to cheaper cuts of beef, pork and chicken, new data presented at the last month’s Annual Meat Conference in Denver on retail shopper behavior from October 2008 through January 2009 reveals that consumers are buying more meat -- including beef -- than they were a year ago.
The data – which found consumer beliefs and actual shopping behavior specific to retail meat purchase decisions taking a sharp turn for the worse during the four month measuring period -- paired the frequency with which shoppers said they were buying meat in a January online panel study of 500 consumers and four-month retail sales data through January from FreshLook Marketing.
Presented by Midan Marketing’s Danette Amstein and Merrill Shugoll of Shugoll Research,
sales data depicted total retail meat and poultry purchases by volume October through January was up 3.5 percent, with beef sales up 3.9 percent, pork sales up 3 percent and chicken sales -- compared to already elevated year-ago sales -- up 2.4 percent over the same year ago period.
Validating the “givens” — that people are eating at home more often and buying more ground beef — the data also showed consumers trading down in beef cuts more than out of beef to other proteins, with many consumers still splurging on high-end steaks and other affordable luxuries.
Pointing to FreshLook data that showed sales of regular ground beef by volume rising 6 percent in the October-January period above a year ago, premium ground beef conversely rose only 0.8 percent in the period. But when it literally comparing the steak vs. the sizzle, the data showed consumers are actually upgrading their purchases. Indeed, retail sales of premium steaks increased nearly 5 percent in the October-January period vs. a year ago, in part at the expense of regular beef steak purchases, which showed a 1 percent dip for the same period.
Moving into pork, all of 2008 demonstrated a shift toward cheaper bone-in cuts of pork, according to the FreshLook data, which measured a 15 percent increase by volume in bone-in pork chop sales during the second quarter of 2008 vs. a 6 percent increase in boneless pork chop sales. During the October-January period, sales of boneless pork roasts declined 14 percent while bone-in pork roast sales rose by 7 percent,
Declaring that “chicken should be celebrating,” Shugoll said both consumer purchase frequency and corresponding FreshLook data showed increased chicken purchases to the tune of 29 percent uptick in retail chicken sales in 2007 and 30 percent in 2008.
Similar to pork, the big meat case winners were the less expensive bone-in chicken parts, which during October-December period, rose 12 percent for breasts, 12 percent for parts (legs, thighs and wings), and 5 percent for boneless chicken breasts.
While most consumer and sales research were comparable, the researchers noted some salient attitudinal and behavioral differences among consumer that have changed as a result of the economic downturn, including:
• Two thirds admitting to tightening their belts, yet not with meat and poultry purchases, which have held the line.
• Looking for bargains, coupons and eating out less
• Buying fewer convenience products
• Continued reliance on both conventional and mass merchandise retailers for the bulk of their fresh meat and poultry purchases
As for implications before retailers and suppliers going forward, the lingering recession that finds more price sensitive consumers will in turn, prompt changes in the normal product mix based on retail package prices. Expensive meat cuts will incur higher shrink losses, thus requiring careful evaluation of how retail prices for more expensive meat cuts are determined. The researchers thusly recommend a cents-per-pound pricing method vs. the convention percentage markup method.