Supermarket giant Coles has defended its beef sales performance since the introduction of its no-HGP policy in January, pointing to results from a second independent consumer survey and internal polling work as evidence of strong and growing consumer support.
Earlier Morgan retail consumer survey data discussed in a Beef Central article on May 18 suggested that while Coles had achieved a spike in sales during January at the height of the post-launch non-HGP beef media push, market share may have since returned to closer to historic levels.
Coles general manager meat, Allister Watson, said a parallel survey conducted by the Nielsen company painted a somewhat different picture.
“The Nielsen data lines up more closely with Coles’ view of how our beef sales are going, and what suppliers are telling us as far as market share is concerned,” Mr Watson said. “It is something we look at for the whole business, allowing us to compare, reasonably accurately, sales from one period to another.”
Coles own internal survey data had also revealed that 47 percent of customers felt that since the introduction of non-HGP beef, they ‘felt better’ about Coles, overall. About 51pc said the beef ‘tasted better’ than before.
In a case of “Statistics, damn statistics,” the Nielsen data is defined by share of value of trade, whereas the Morgan report surveys number of serves.
“In our view, value is more important to the industry, and it is the data on which we more closely rely,” Mr Watson said.
The most recent Nielsen data clearly shows that Coles' market share in beef has grown since the January 1 activation of the no HGP campaign, and in fact continues to expand.
For the same quarter last year, it suggests Coles' market share was 20.9 percent, growing to 22.2pc for the quarter ended April 15 this year, a rise of 1.3pc.
Mr Watson said national beef sales had shown steady growth since October last year, when both major supermarket retailers dropped beef prices. He challenged the view, however, that lower prices had had a bigger impact on consumer buying patterns than Coles’ HGP move.
“Within our company we measure performance both quantitatively and qualitatively, and the feedback we’re getting from our own customer surveys is that customers are significantly more satisfied with Coles beef since the move to HGP-free in January.”
Asked whether that result was genuinely based on a lift in product performance, or a perception built around the company’s vigorous post-launch marketing campaign, he said there was clear evidence that the product had improved in tenderness.
“There’s been a shift in boning group performance, as a direct result – typically two boning groups,” he said. “That’s no surprise, as it is widely recognised under the MSA grading, and customers are giving us positive feedback that supports that premise.”
Supply side issues
On supply-side issues, Mr Watson said it had not been harder than anticipated to source and manage appropriate HGP-free stock through the supply chain.
“We spent 18 months setting this supply chain up before we went to market with the program. What has surprised us is the number of producers who have come out in support of the Coles program, and are making HGP-free cattle available.”
The company had always had a significant proportion of non-HGP cattle passing through the program, he said.
So are Coles’ grainfed livestock suppliers being adequately compensated for removing HGP from their production systems?
“We’ve had absolutely no complaints from any of our suppliers over what we are paying them for finished cattle,” Mr Watson said. “We know there is a cost involved in applying the principle, and weightgain is not as good as in implanted cattle, but we want to keep our suppliers in good financial shape and reward them appropriately.”
Questioned about the potential intrusion of Coles’ livestock sourcing into Australia’s pool of EU-eligible HGP-free cattle discussed in an article in Beef Central last week, Mr Watson said while it may well be occurring, he made no apology for giving livestock producers more marketing choices for their cattle.
“There is a myth that cattle destined for export markets are in some way different from those directed into domestic. The only difference, really, is weight and feeding duration,” he said.
Coles, in its own right, is also a sizeable exporter of beef out of Australia, typically for cuts that are harder to shift through the mainstream domestic market.
“The new HGP-free aspect does have some value when seeking international customers for those products,” he said. “It gives them a point of difference from other Australian and US beef that may be competing in the same segment.”
“Everyone is looking for a point of difference in today’s market, and that’s a great thing. Ever carton lid, whether it be for domestic or export use, now clearly carries a no-HGP identity.”
Mr Watson said Coles was ‘more than happy’ with the retail beef results it had achieved nationally since January’s program launch, and the feedback from customers.
The growth being seen in the beef category was above expectations, he said.
He confirmed that there was a shift occurring in existing grocery shoppers who previously bought the fresh meat elsewhere, but who were now buying their beef in-store.
“It’s what we call participation rate. The number of customers that buy beef as part of their overall transaction at Coles has gone up significantly,” he said.
The marketing campaign behind the HGP move had also been re-activated several times since the original media blitz.
“We’ll keep reminding customers about what we have done in the beef area. We plan to constantly reinforce that this is not a marketing gimmick, but genuinely improves the product, and is an important point of difference,’’ Mr Watson said.
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