Coles strengthens retail beef market share position: Is ‘Down, Down’ responsible?

Jon Condon, 26/08/2013


The Coles supermarket group improved its national retail beef market share relative to its largest competitors Woolworths and independent butchers last month.

One possible explanation is Coles’ latest incarnation of its ‘Down, Down’ price discounting campaign launched in July – this time focussing on beef mince, where retail prices on 83CL ‘Three-Star’ mince has been reduced to just $5/kg.

That may be only part of the answer, however, as Coles also lifted its share relative to Woolworths and independents across the entire fresh meat protein category, including beef, chicken, pork, lamb and seafood.

According to the latest monthly survey conducted for by Nielsen Homescan*, Coles’ retail value beef share for the rolling quarter ended July 13 rose by another 0.4 percent since June, to 25.2pc.

It’s Coles best result in at least two years, and continues a long-term trend in increased retail beef value market share for the company.

Largest market player Woolworths record a slight check in its share, declining 0.4pc to 32.4pc of all retail beef sales nationwide, by value.

That should be put into some context, however, as it comes after a seven-month rise in performance, starting back in December when Woolworths’ share was 31.3pc.

The latest result for Coles has narrowed the gap a little between it and Woolworths to 7.2pc, after sliding out to 8.3pc in May.

Again, it was the independent retail butchery segment which lost ground in the latest Nielsen survey, continuing a prolonged eight-month trend.

Butchers accounted for 21.7pc of retail beef value for the rolling quarter ended July 13, down 0.2pc from June, and back almost 3pc since last December.   Butchers lost second place in retail share rankings to Coles in February this year, after a gradual narrowing of the gap between the two for the previous 18 months. Coles has now widened that gap over butchers out to 3.5pc, and it shows no sign of closing any time soon.

Election factor

There is a widely held view that butchers are suffering more than most retailers because of the protracted Federal Election process.

Butchers often say that the lead-up to elections are bad for business, because they instil a sense of uncertainty and unease in consumers’ minds that is reflected in spending patterns. That ‘defensive’ spending attitude may in turn drive more consumers to supermarkets engaged in price discounting.

The theory is that trade often picks up for butchers after elections are decided, as consumers’ sense of uncertainty is eased and they become more optimistic, starting to buy again more on ‘quality’ rather than ‘price.’ It will be interesting to examine any evidence of that in survey data for September, to be released in mid-October.

Outside of the ‘big three’ (Woolworths, Coles, independent butchers), there hasn’t been a lot of change in retail value market share last month.

Independently-operated IGA supermarkets improved marginally to 9.4pc of share, regaining ground lost the previous monthly cycle, and getting back close to the company’s two-year high. The Aldi group continued to make steady progress, lifting to 7.7pc share, continuing a four-month rise since March from 6.9pc.

The ‘other’ supermarkets category was softer for the second consecutive rolling quarter at 3.6pc.  

It should be noted that this Nielsen assessment is based on rolling quarterly figures, not single monthly registrations, because they are regarded by analysts as being a more accurate reflection of longer-term trends. 


Category outlook

The overall fresh meat category (beef, chicken, lamb, pork, seafood) recorded value growth of +2.5pc compared to the same period last year. Nielsen said that was due both to an increase in price (+2.8pc) and shopper frequency (+2.9pc).

Despite beef’s share increasing by 0.8pc from last month, beef’s value share of all meat protein sales remains 1.16pc lower that this same period in 2012.

The value shares for lamb (unchanged) and pork (-0.02pc) have remained stable year-on-year, while chicken’s value share (+1pc) has experienced the strongest growth over this period.

In terms of pricing, there have been strong price increases across most meats over the past rolling quarter compared to last year. Chicken is up 75c/kg and pork +54c/kg. Lamb and beef were the only meats experiencing price drops, decreasing by 50c/kg and 20c/kg respectively.

It’s important to note that the prices reported by Nielsen are measured as the average $/kg value of the items in the surveyed consumer shopping baskets. It does not attempt to represent the overall average value of beef and other proteins being sold in the retail marketplace.

Under these terms, beef recorded an average price of $9.64/kg for the July rolling quarter; chicken $8.04/kg; lamb $10.99/kg; and pork $10.28/kg.



* What is Nielsen Homescan?

  • A consumer panel of 10,000 households
  • Demographically and geographically representative of all Australian households
  • Electronically record their household purchases of all grocery foods (fresh and packaged)

How are panel participants recruited?

  • Households are recruited on-line via a random sampling method
  • The Homescan panel is stratified by life stage, region and household size
  • Households are screened to assess suitability and to ensure they do not work in marketing, market research or FMCG.




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