28 March 2012

3 minute read

Europe

In the last year, GB retail beef prices have been five per cent higher than previous year levels. However, these price increases have been more concentrated in the last six months or so. In the last 12 weeks for example, retail beef prices in GB were 12 per cent higher than previous year levels with an average retail beef price of £6.75/kg. In the four weeks ending 19 February 2012, prices in GB averaged £6.80/kg.

There are concerns about these higher prices on demand. Firstly, it ought to be noted that with tighter supplies, it is impossible for consumers to eat more beef because unless there are reduced exports / increased imports it will simply not be there on the shelves for people to buy it.

Retail beef sales volumes were back by just three per cent in the four weeks ending 19 February 2012 compared to the same period last year. This was despite a proportionately greater 10 per cent increase in price.

During February there was a sharp increase in beef stewing sales with volumes up by 13 per cent year on year. Mince sales were also up marginally with a three per cent increase in volumes. Sales of more expensive products such as frying / grilling and roasting joints remained under pressure.

Perhaps the greatest concern is that higher prices may be putting people off beef altogether. It is encouraging therefore that the impact of higher prices on penetration over the last year has been a decline of just one per cent. Over the last year (52 weeks ending 19 February), the average four weekly penetration of beef in the retail market in GB was 54.4 per cent. This was just down slightly from the corresponding figure of 55.2 per cent in the corresponding 52 week period last year. In February, penetration was down by one per cent with 57 per cent of respondents buying beef although over the longer 12 week period ending 19 February penetration was down by three per cent.

There has been an impact of the higher prices on the volume of beef bought by consumers each time they go to the butchers counter or the meat aisle. The average weight per purchase was down by five per cent over the 12 weeks ended 19 February compared to the same period last year. In the four weeks ending 19 February the average weight was down by two per cent year on year.
On the positive side, overall expenditure on beef has increased sharply as a net impact of reduced volumes sales and higher prices. Total beef expenditure in the four weeks ending 19 February 2012 was seven per cent higher than in the same period in 2011. In the longer 12 week period ending 19 February retail expenditure on beef increased by just four per cent relative to the same period last year.

GB Lamb Sales Remain Under Pressure

In GB, retail lamb prices were up by 12 per cent over the four weeks ended 19 February, relative to the same period last year. In fact over the year to date prices were up by 16 per cent year on year.

As a result of the higher prices, volume sales were down by 16 per cent year on year with retail prices averaging £9.08/kg during the four weeks ending 19 February. It is a concern that penetration was down by 9 per cent during that period with the average weight per purchase down by seven per cent. As a result of these changes expenditure was down by six per cent compared to the same period last year

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