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    Fresh Meat Trends:<br />PG Annual Survey Finds that Meaty Values Matter Most

    In the days leading up to the Annual Meat Conference that’s about to get underway this weekend in Orlando, Fla., I’m pleased to present a preview of the hot-off-the-press findings of Progressive Grocer’s 2010 Meat and Seafood Operations Reviews.

    In the days leading up to the Annual Meat Conference that’s about to get underway this weekend in Orlando, Fla., I’m pleased to present a preview of the hot-off-the-press findings of Progressive Grocer’s 2010 Meat and Seafood Operations Reviews.

    Unlike other category-specific surveys in the marketplace, our exclusive, retailer-driven “annual state of the meat and seafood” reports are a hallmark of our brand’s rich legacy of reliable, need-to-know industry intelligence.

    Painstakingly compiled by our diligent resident director of market research, Debra Chanil, from the collective input of retail meat and seafood executives from around the country, the yearly studies cover the critical issues unfolding in supermarkets on a daily basis, including same-store sales performance, leading departmental challenges, labor considerations, and fastest-selling items.

    The latest installment of PG’s 2010 Meat Operations Review finds grocers rustling up respectable overall sales at the expense of premium-priced proteins, in the wake of one of the most trying years on record, rife with bargain-hunters and intense competition. Aggressive promotions and prominent circular placement were especially important ingredients in helping most grocers maintain stable fresh meat and seafood sales, which remained among the few bright spots in a mostly bleak year, a finding corroborated by nearly 50 percent of this year’s Meat Operations Review respondents reporting increased total meat sales during 2009.

    Survey participants in this year’s retail meat report represented a diverse cross-section of the views of supermarket meat directors at national chains, regional retailers and independent grocers, who were asked to assess the performance of their average meat departments for the 12-month period ended Dec. 31, 2009.

    Although prices have always been an influential consideration for consumers when shopping the meat department, the past year’s survey has brought forth a strong consensus among participants that targeted promotions, deeper discounts and smaller pack-sizes drove volume growth in the meat category largely at the expense of more pricey proteins.

    “The ad mix has changed and shoppers are making larger purchases of ad items along with buying cheaper cuts of meat,” noted one retail meat official, whose sentiments were echoed by several other survey participants. “Our customers are buying more on-ad and value-priced items than before, resulting in fewer full-price rings.”

    Trading down was another prevailing theme that emerged from this year’s slate of Meat Operations Review respondents, who also repeatedly cited consumers’ affinity for eating at home and shifting to cheaper cuts like ground beef and more luncheon meats, vs. higher-priced steaks and chops. Stocking up during sales was also noted by several meat directors, who noted consumers’ penchant for buying more large packs when savings were significant, alongside cutting back on meat department purchases.

    In a closer look at the meat survey data, about half (47 percent) of survey panelists, as noted above, estimated total meat department sales gains during 2009, with 31 percent experiencing decreases, rounded out by 22 percent who posted static meat department sales.

    Our annual survey also found same-store meat sales up during 2009 for 36 percent of grocers, while 32 percent saw either decreased or status quo comp meat sales vs. the prior 12-month measuring period. All told, the total same-store sales sum represents a 3.4 percent year-to-year gain, which, while not fantastic, is nevertheless respectable when considering the challenging time frame the retail meat survey was staged against.

    Although supermarket meat department sales were stable, profits took a hit during the past year among 26 percent of survey participants, while 35 percent reported higher profits, with the remaining 39 percent noting that meat profits remained unchanged.

    While food shoppers are bent on seeking out deals in the meat department, fresh beef sales accounted for 36.9 percent of meat and seafood sales by segment, followed by 19.4 percent for fresh poultry, 15.5 percent for pork, 13.5 for seafood, 5.2 for lamb and 3 percent for veal.

    The remaining 12 percent of meat and seafood department sales is generated by an assortment of increasingly popular sellers, including hams; alternate/specialty proteins (i.e., bison); store-made sausage products; quick-and-easy/value-added meal solutions; seasoned and assembled ready-to-cook meats and entrees; and value-added chicken and seafood items.

    In the roundup of key concerns facing retail meat executives — who were asked to rank the seriousness of various issues on a scale of one to six — “Attracting more shoppers to the meat department” once again topped the list, paced closely by grocers’ perennial consideration, competition. Profits, not surprisingly, placed as the third-biggest concern of the day for meat directors, while customer confusion/perception of meat-related issues ranked as the fourth-leading concern. Food safety and country-of-origin labeling issues rounded out the list of key concerns among grocery meat execs.

    Retail meat officials responding to PG’s Annual Meat and Seafood Operations Reviews survey also sounded off about the various ways departmental sales and performance could be improved with the help of their vendor partners in the following areas:

    —Increased availability of natural and organic products
    —Consistency
    —Controlling costs and maintaining quality.
    —Cost of goods (vs. Walmart)
    —Food safety
    —Government regulations
    —Product availability
    —A level playing field with chains
    —More availability of locally sourced proteins
    —Pre-booked price protection
    —Quality
    —Spending time and efforts on growing sales of category leaders and known value items, and less time spent launching new items
    —Timely orders
    —Help with controlling out-of-stocks

    PG’s complete 2010 Meat Operations Review is available in our March issue. For more information, visit our Web site at www.progressivegrocer.com/progressivegrocer/in-print/current-issue/index.jsp.

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