Resurgent Woolies’ retail beef share growth continues

Jon Condon, 08/05/2014

A RESURGENT Woolworths has continued its recent market share growth spurt against its two largest competitors – Coles and independent butchers – according to the latest retail share survey conducted on industry’s behalf by Nielsen Homescan.*

Number-one retailer Woolworths has further strengthened its position, logging four consecutive months of retail beef share growth, while nearest competitors have either marked-time, or lost a little ground.

Woolies MSA VerticalFor the rolling quarter ended March 22, Woolies lifted its share of national retail beef sales to 34 percent – its best result in at least three years, and possibly ever. The result means Woolies has picked up an additional 2.2pc of the national retail beef market in the past eight months, a big number, in the context of such surveys 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 24.5pc of retail beef sales, down from 24.8pc for the previous February rolling quarter. After a period of rapid growth in retail share since late 2012, Coles’ performance has plateaued, or even declined a little 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 21.6pc, unchanged from the previous month, but not yet stemming a long-term downwards trajectory in market share that has occurred since late 2012. Butchers have lost 3pc of retail share, mostly to the two large national supermarkets, in the 18 months since.


Smaller supermarkets mixed

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

The independently-owned IGA group logged a 9.1pc share for the March rolling quarter, easing from 9.3pc the previous month, and an overall market share loss of more than 1pc since August last year, when the company was advertising heavily.

Another smaller retailer, Aldi, lifted its share marginally to 7.9pc last month, while the ‘other’ supermarkets grouping, including Costco, independent supermakrkets and others, also rose a little to 3.7pc.

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 March 22, the Australian fresh meat category (beef, chicken, lamb, pork, seafood) recorded a decrease in value of 0.6pc compared to the same period last year. This was driven by a decrease in price (-2.6pc), which was larger than the increase in volume (+2.0pc).

Beef’s value share of overall expenditure on fresh meat protein has decreased by 1.03 percentage points over the most recent quarter compared to the same period a year ago, driven by a 3.8pc decline in beef prices compared with this time last year, despite the small increase in volume (+0.4pc) . Lamb’s value share also declined (-0.54pc), but unlike beef there’s been no increase in volume last month (-4.1pc).

Value share for most other proteins rose over the same period a year ago, with chicken up 0.6pc (despite a price decrease of 0.7pc), while pork increased in both value and price (+0.66pc and +4.2pc 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 $9.67/kg for the March 22 rolling quarter (down 38c/kg on a year ago); chicken $8.13/kg (-22c); lamb $11.04c/kg (-6c); and pork $10.70/kg (up 8c).


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 35.5pc of all meat sales, up 0.9pc on a month earlier, but almost 1pc down on a year ago.

Chicken filled second place on 26.9pc of total meat protein sales, up 0.5pc on a month earlier; lamb was third with 12.9pc, down 0.2pc; and pork fourth with 10.4pc, also down 0.3pc.


* 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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