Margin widens in Woolies’ hold on retail beef share

Jon Condon, 30/05/2014

woolies-posterWoolworths’ hold on retail beef market share in Australia has continued to widen in the latest retail survey conducted on industry’s behalf by Nielsen Homescan.*

The nation’s largest retail supermarket group continues to expand its retail beef share relative to its two closest competitors – Coles and independent butchers.

Woolworths has now logged five consecutive months of retail beef value share growth, while its biggest rivals have lost ground over the same period.

For the rolling quarter ended April 19, Woolies lifted its share of national retail beef sales to 34.1 percent – its best result in at least three years. The result means Woolies has picked up an additional 2.3pc of the national retail beef market in the past nine months, a strong result in the context of a retail market where movement is often measured in fractions of a percent.

Since January (33.5pc for the rolling quarter), Woolworths has for the first time controlled more than one third of Australian retail beef turnover, by value.

The nation’s largest supermarket chain now operates 920 stores across Australia, adding close to 100 new sites to its portfolio since 2010. Nearly 40 more supermarkets were operating in the group’s third quarter ended March 31 than the same period last financial year.

That suggests it is both organic beef sales growth in existing outlets, plus the growing number of new stores, which is driving the company’s retail share performance. Less than two years ago, Woolworths share was 2.7pc less than what it is today, at 30.9pc.

Biggest rival Coles lost a little ground in the latest Neilsen retail survey, accounting for 24.4pc of retail beef sales in the April rolling quarter, its worst result since November last year. After a period of rapid growth in retail share since late 2012, Coles’ performance has eased gently since the middle of last year.

The recent advance by Woolworths appears to have come at the expense of most of its retail competitors.

Independent butchers’ retail share last month was 21.3pc, continuing a gradual two-year decline in share. Butchers have lost 3.7pc of retail share, mostly to the two large national supermarkets, in the past 18 months. Supermarket retail price wars have been a contributing factor.

Smaller supermarkets mixed

Smaller supermarket chains recorded mixed results in the latest Nielsen monthly survey.

The independently-owned IGA group logged a 9.0pc share for the March rolling quarter, easing from 9.1pc the previous month, and large 1.3pc decline in total market share since November last year, when IGA was advertising heavily.

Another smaller retailer, Aldi, continues a strong recent growth performance recording a 7.4pc market share in the April rolling quarter, lifting 0.7pc since December, while the ‘other’ supermarkets grouping, including the likes of Costco, independent supermarkets and others, also rose a little to 3.8pc.

Readers should note that the Nielsen assessment is based on rolling quarterly figures, not single monthly registrations, because they are considered to be a more accurate reflection of longer-term trends.

Overall fresh meat sales value down

For the rolling quarter ended April 19, the Australian fresh meat category (beef, chicken, lamb, pork, seafood) recorded an increase in value of 0.4pc compared to the same period last year. This was driven by a small rise in price (+0.04), coupled with an increase in volume (+0.3pc).

Beef’s value share of overall expenditure on fresh meat protein has decreased by 0.4 percentage points over the most recent quarter compared to the same period a year ago, driven by a 1.7pc decline in beef prices compared with this time last year, despite the small increase in volume (+1.0pc) . Lamb’s value share decline was greater by comparison (-0.88pc), driven by a large fall in volume (-11.1pc).

Value share for most other proteins rose over the same period a year ago, with chicken up 0.55pc (despite a price decrease of 0.08pc), while pork increased in both value and price (+0.81pc and +0.6pc respectively).

The decline in beef price is undoubtedly linked to the huge rise in kills seen in 2013 and early 2014 due to widespread drought, which added supply-side pressure. Intensively-raised chicken and pork were much less exposed to drought, provided feedstuffs were not affected.

It’s important to note, however, that the prices reported by Nielsen are measured as the average $/kg value of the items in the surveyed consumers’ 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 $9.83/kg for the April 19 rolling quarter (down 17c/kg on a year ago); chicken $8.23/kg (-8c/kg); lamb $11.58c/kg (+64c); and pork $11.12/kg (up 57c).

Retail fresh meat category share

In other information of value in the latest Nielsen survey, beef easily retained the highest share of all meat sales against competing proteins, responsible for 36.2pc of all meat sales, up 0.7pc on a month earlier, but almost 0.4pc on a year ago.

Chicken filled second place on 27.1pc of total meat protein sales, up 0.2pc on a month earlier; lamb was third with 13.1pc, up 0.2; and pork fourth with 10.6pc share of all red and white meat protein sales, up 0.2pc.


* 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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