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AHDB Pork Quarterly Category Report

28 August 2014

BPEX Quarterly Category Report - Review to July 2014BPEX Quarterly Category Report - Review to July 2014

BPEX Quarterly Category Report

  • GB finished pig prices have been under pressure this spring, with the normal seasonal rise in prices less apparent than normal and finishing earlier. Prices peaked in late May at just under 165p/kg, when they were close to their level last year. Since then, they have fallen back and, by early August, had dropped below 160p/kg for the first time since April 2013. The number of pigs being finished has been slightly higher this year, following a mild winter, and this has been met by subdued consumer demand. Lower EU prices, partly due to the stronger pound, have also meant somewhat higher pig meat imports

  • EU pig prices have been suppressed by Russia's ban on EU pork imports, despite quickly recovering from their initial fall. They have remained below year earlier levels, despite tighter pig supplies. Nevertheless, strong demand from other export markets, particularly in Asia, has helped ensure that prices remain firm by historic standards. By the early summer, prices were close to last year's levels, peaking at around €1.75/kg in late June. However, unlike the last two years, prices then fell as the holiday season began, hitting demand, and by early August were 20 cents lower than a year before at around €1.65/kg (130p/kg).
  • For the 52-week period, there was a fall in the amount of fresh beef, lamb and poultry bought compared with a year earlier. Sales of fresh pork recorded a small increase in volume purchases, up less than 1% on the year. Sales of fresh pork have been supported by consumers switching away from the relatively more expensive beef and lamb in favour of cheaper sources of protein. However, fresh meat sales have also been affected by households switching to frozen chicken

  • Despite the fall in volume sales, household spending on fresh chicken and beef increased on the year. Fresh beef recorded the largest increase in household spending, largely as a result of price inflation. Lamb was the only fresh meat category to show a fall in expenditure on the year, largely due to falling purchases of leg joints. Household spending on fresh pork was only marginally higher than year earlier levels.

Category Inflation / Deflation

Annual Change in Retail Meat Prices and the All Items Retail Price Index - June 2014

  • The food retail price index for June rose by 0.4% compared to the previous year and by just 0.2% compared with the previous month. Compared to last year, food price inflation has been less than 2% since January and even turned negative in May

  • Retail prices for pork were 2.1% lower over the 12-month period and almost 3% lower compared with May

  • Retail prices for bacon were more than 2% down over the 12-month period but slightly higher than retail prices recorded during May

  • The retail price indices for beef and lamb both increased by more than 3% over the 12-month period. The retail price index for domestically-produced lamb was more than 5% higher over the year. Retail prices for poultry during June showed little change compared with a year earlier.

Retailer Overview

  • For total meat sales, the top four retailers have seen falling share of the market in value terms, down to 65.9% of total market expenditure from 68.3% last year

  • Three of the top four retailers saw a fall in market expenditure on fresh pork sales compared with last year. The top four account for 68.4% value share for fresh pork; down from 69.3% last year

  • The hard discounters continue to grow in market share, accounting for 9.3% of market expenditure on presh pork; up from 6.5% last year. The hard discounters have seen the most significant sales growth of all retailers, recording an increase in spend on fresh pork of 44.8% on last year

  • Sausage sales grew by 5.2%, with the top four multiples accounting for 64.9% of sales. None of the top four retailers, however, grew ahead of the market. The hard discounters, with 4.8% of market share for sausages, recorded a 40.4% increase in sales compared with last year.
  • The hard discounters trade more than their overall share of the grocery market in pork and bacon

  • All of the top four multiples overtrade in ham, while the hard discounters trade less than their relative share of the overall grocery market

  • Three of the top four multiples trade less than their relative share of the overall grocery market in sausages.

* MAT = Moving Annual Total. ** RST = Retailer Share Track.
A consolidation of data for all key commodity products, 237 markets in total.
Markets fall into five key trading sectors: Packaged Groceries, Fresh Foods, Toiletries, Healthcare, Alcohol.

August 2014

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