Woolies up, butchers down in latest retail beef share assessment

Jon Condon, 09/04/2014


Earlier trends have continued in the latest monthly retail beef market share survey conducted on industry’s behalf by Nielsen Homescan.*

Number-one retailer Woolworths has further strengthened its position; independent retail butchers have lost further ground; and number-two ranked supermarket Coles remains unchanged.

For the rolling quarter ended February 22, Woolies lifted its share of national retail beef sales to 33.6 percent – its best result in at least three years, and possibly ever – representing a surge of 1.8pc share in the past seven months.  The previous month appears to have been the first time that Woolworths has controlled more than one-third of the nation’s domestic retail beef sales, 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. That suggests it is both organic beef sales growth in existing outlets, plus the growing number of new stores, which is driving retail share. Less than two years ago, Woolworths share was 2.7pc lower, at 30.9pc.

Biggest rival Coles stayed unchanged in the latest survey, accounting for 24.8pc of retail beef sales – unchanged from the previous month’s rolling quarterly average. After a period of rapid growth in share since early 2012, Coles’ performance has plateaued since about June last year, at around the current figure.  

The recent advance by Woolworths again appears to have come at the expense of independent retail butchers and second-tier retail chains.

Deep discounting on selected red meat lines, including mince, plus heavy promotion and broader fresh and value-added product range appear to be delivering market share to Woolworths.

Independents continued a long-term downwards trajectory in market share, finishing the February 22 rolling quarter at 21.6pc, a 0.3pc loss on the previous month. A year ago, butchers still held a larger retail share than Coles, at 24pc of retail beef sales, representing a decline of 2.4pc share since.

Smaller supermarkets mixed

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

The independently-owned IGA group logged a 9.4pc share for the February rolling quarter, easing from 9.5pc the previous month, but representing a more significant fall from 10.3pc as recently as November, when the company was advertising heavily.

Another smaller retailer, Aldi, lifted from 6.8pc to 7pc, while the ‘other’ supermarkets group was unchanged at 3.6pc.

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 February 22, the Australian fresh meat category (beef, chicken, lamb, pork, seafood)  recorded a decrease in value of 2.0pc compared to the same period last year. This was driven by a decrease in price (-6.8pc), which was larger than the increase in volume (+5.2pc).

Beef’s value share of overall expenditure on fresh meat protein has decreased by 1.31 percentage points over the most recent quarter compared to the same period a year ago, although the decline was a lot smaller for the most recent four-weekly period (-0.73pc).

Value share for most other proteins rose over the same period a year ago, with chicken up 0.86pc, lamb up 0.09pc and pork up 0.48pc.

Almost all meats experienced price drops during the latest quarter. Lamb (-$1.01/kg) and beef (-$0.84c/kg) prices decreased the most, while chicken was -$0.41c/kg and pork, -$0.37c/kg compared with a year ago.

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 is creating pressure on the supply side. Intensively-raised chicken and pork were much less exposed to drought, provided feedstuffs are not affected. Seafood was the only category to show a rise last quarter, up 86c/kg on a year ago.

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 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 $9.26/kg for the February 22 rolling quarter (down 84c on a year ago); chicken $7.93/kg (-41c); lamb $10.17c/kg (-$1.01); and pork $10.05/kg (down 37c).

Retail fresh meat category share

In other information of value in the latest Nielsen survey, beef easily retained the highest share of meat sales against competing proteins, responsible for 34.6pc of all meat protein sales, up 0.1pc on a month earlier, but almost 1pc down on a year ago.

Chicken filled second place on 26.4pc of category value share, up 0.7pc on this time last year; lamb was third with 13.1pc, down 0.1pc; and pork fourth with 10.7pc, unchanged.



* 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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