Exclusive:

The controversial move to HGP-free beef supply appears to have had little lasting impact on Coles' domestic retail beef market share, according to latest Australian Meat Purchasing data.

Rolling monthly average figures obtained late yesterday suggest retail price wars, rather than any HGP factor, have had the biggest recent impact on consumer buying patterns.

Coles logged a rise in market share in the November-January period, but that came as part of a gradual recovery out of a mid-2010 slump in sales performance where national retail market share fell as low as 17.5pc around August, according to the survey. Coles’ share has since recovered to more historically typical market share around 21pc, but that has simply picked up the ground lost to competitors last year. Coles most recent market share figure is 21.2pc.

At the same time, major supermarket rival Woolworths has seen little negative impact on its market share figures, sitting at 29.3pc in latest survey figures, up from 28.8pc for the previous reporting period, and 1.5pc higher than March last year. In fact all the reported channels – butchers, Woolworths, Coles, Aldi, IGA/Foodland and ‘other’ – have been fairly stable since the start of 2011.

By any standards, the consumer gains made by Coles appear to be modest, given the productivity sacrifices attached to abandoning HGP as part of its beef production system from January 1.

Looking at monthly, rather than rolling three-month figures which are considered more robust, Coles’ national beef retail market share rose significantly, by 3pc from December to January, to 24.3pc. Over the same period however, rival Woolworths, which continues to sell beef produced with the use of HGP, recorded an even larger 6.9pc rise to 33.2pc market share.

The big losers in the month of January appeared to be independent butchers, down 4.9pc to 25.8pc, the Aldi supermarket chain, and independent markets/delis.

Beef price wars

Another critically important factor when gauging the true impact on consumers from the Coles HGP move in January is earlier retail price adjustments. During November – long before widely-publicised more recent supermarket price wars emerged on lines like milk and chicken – Coles and Woolworths engaged in a savage price war on beef, heavily discounting prices on a wide range of popular cuts. There has been no sign of price adjustment since.

Soon after this price war took effect, there was signs of a consumer migration, generally, from independent butchers and smaller retailers to the ‘big two’, but butchers have since hit back, and have lifted rolling three-month average market share from 27.4pc to 28.7pc since January figures.

Based on the survey, it can be argued that any purchase decision influence over consumers concerning HGP may now be in decline, following a major promotional blitz by Coles featuring celebrity chef Curtis Stone soon after its January HGP-free launch. Illustrating this, Coles rolling-quarter share for January spiked at 24.3pc, its best result since December 2009, but the next two months returned to closer to the long-term average.

At the same time, Woolworths’ result also jumped in January, reaching 30.3pc. Counter-promotion may have delivered that surprisingly strong result, in the face of the Coles challenge.

The earlier price war effect makes it impossible to distinguish consumer trends on the basis of the HGP issue alone, analysts say.

A source close to Coles recently suggested to Beef Central that the company had picked up 170,000 new beef customers a month by February. A considerable portion of these were identified as ‘existing’ Coles shoppers who were now for the first time stopping by the store’s chilled meat cabinet while in the store, instead of buying their fresh meat elsewhere.      

• Coles and Woolworths will be given the opportunity to respond to the latest Australian Meat Purchasing Data figures, in an upcoming article.