Meat price deflation is leading to increased retail promotions and sales.
“With meat prices down over 15% from their mid-2015 highs with increased supplies, consumer retail beef meat case purchases rebounded strongly in 2016,” said Alison Krebs, director of market intelligence at the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff Program. “Wholesale prices and ultimately retail prices adjusted downward, improving margins for retail operators and affordability for consumers.”
For the 52 weeks ending Dec. 25, 2016, retail beef pound sales were up 5.4% across grocery stores with annual sales above $2 million, mass merchants and club stores (excluding Costco), per IRI/Freshlook sales data.
“Consumers took advantage of the lower feature average prices, down 7.6%, by increasing their percent of beef purchased on feature by 4.6% to 31.4%” during the same time period, said Krebs.
Meanwhile, consumers continue to purchase organic, naturally raised, grass-fed, hormone-free or antibiotic-free beef. As total beef sales are on the upswing, the share of total beef purchases for beef making such production claims is holding relatively steady at 4.2% of total retail beef dollar sales, according to Krebs.
“Beef featuring is driving more beef sales and beef sales drive more total store sales. And, for those consumers seeking options, there are a variety of beef options available to meet the retailer consumers’ needs,” she said.