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LMC Report: Consumers Spend More on Beef

30 March 2009

UK - Despite the economic recession there are very encouraging signs in the UK red meat market with total customer expenditure on beef up by eight per cent and lamb up by four per cent.

Beef prices up 12 per cent

There has been a substantial increase in price over the last year with average retail prices up by 12 per cent (up 63p/kg from £5.22 this time last year). The increase in price has caused total consumer expenditure on beef rise by eight per cent over the year. Over the last 52 weeks retail sales of beef have amounted to around £1.75bn. This is up by 8 per cent from £1.62bn the previous year.

Volume sales down slightly

The increased price of beef is having an impact on the amount sold. Annual volume sales of beef now amount to 300,000 tonnes, almost three per cent down on last year. It appears that the reduced volume is being driven in part by a small fall in penetration (-1 per cent), whereby slightly fewer shopping baskets contain beef. However, the main driver is that consumers are purchasing smaller pack sizes with the average weight per purchase falling by three per cent. This would indicate that consumers have become less likely to be influenced by special offers such as “buy-one-get-one-free” and are not buying roasting joints which are the heaviest cuts.

Consumers more sensitive to a lamb price increase

In the recession, consumer demand for lamb has fallen more heavily than beef with volume sales down five per cent. This is interesting considering that the rate of increase in the retail price of lamb has not been as fast as that for beef, with lamb only increasing by 9 per cent over the same period (up 53p/kg from £5.88p/kg).This would indicate that consumers are more sensitive to an increase in the price of lamb than to an increase in the price of beef. As with beef this has manifested itself with the average weight per purchase falling, perhaps showing that consumers are opting to purchase smaller pack sizes.

Prime cuts suffering

While the overall volume of beef and lamb sold is only down slightly, the volume of prime cuts sold is much lower than last year. In the 12 weeks ending 22/02/09 the volume of beef roasting joints and steaks sales was down by almost 16 per cent on the same period last year as consumers switched to stewing beef and mince. Lamb sales followed a similar pattern with the volume of lamb stewing meat sold up by 15 per cent.

Further Reading

- You can view the full report by clicking here.

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