Winter doldrums take their toll on MFP

As autumn wanes and we head into the depths of winter, the changing weather is too having an effect on the meat, fish and poultry (MFP) market. Over the 12 weeks to 3 November 2019, value growth has become more of a challenge for primary meats, and processed meat and poultry sees volume sales dropping. Chilled fish remains the best performing market, growing 1.5% in value terms, outstripping the growth seen in the wider grocery market (1.3%). The supermarkets are looking forward to Christmas, with a wet autumn and political uncertainty all holding back growth. This is reflected in-store, with shelves already stocked high with mince pies and Christmas puddings. We’ve not yet seen any early uplifts for the MFP categories, as the chilled markets tend to peak in the last few weeks before Christmas.

Chilled fish remains the top performer in MFP and has proven to be resilient to our changing weather. Nathan Ward, Business Unit Director, MFP, explains: “Chilled fish continues the healthy growth we’ve seen in previous periods, with natural products leading the way, selling 846,000 more kilos this year. Growth in natural fish is particularly driven by full price sales, as retailers move away from Y for £X deals and towards price cuts. More pricey fish like salmon (up 14%), and sea bass (up 25%) play a key role in the value growth. A third of the population has bought natural fish in the last 12 weeks, including 363,000 additional shoppers over that period. Breaded products show the fastest growth, bought by 4.6 million shoppers -  257,000 more than last year. Breaded lines are bolstered by promotional support, with sales on deal up 18% year on year as more price cuts hit the market.”

Ward continues:  “Primary meat and poultry products are struggling to find growth this period, with volume up slightly and value sales down, as shoppers move into cheaper cuts and prices fall across the board. Chicken is the top performer in actual terms, with 5.1 million additional kilos purchased year on year, despite falling value sales. Empty nesters and retired shoppers have contributed two thirds of the volume growth for chicken, with both groups buying over 50% more volume on promotion than last year. The key cuts driving growth remain breasts (up 6%) and legs (up 18%), both of which have seen increased promotional investment with significant price cuts supporting the growth. Whole birds continue to decline (down 4%) as 458,000 fewer shoppers put them in their baskets.”

Ward continues:  “Red meat also faces challenges this period with beef, lamb and pork all seeing strong volume declines over the last 12 weeks as fewer shoppers buy them on fewer trips. Beef is seeing the lowest volume decline, with 277,000 fewer shoppers and 730,000 fewer trips, as shoppers buy fewer roasting joints (down 10%), mince (-2%) and stewing beef (-6%). Roasts continue their long term decline and have been promoted less over this period which has led to falling base sales. The shoppers behind these losses, empty nesters and retired, are the same shoppers driving growth for chicken. Mince has seen more price cut promotions (+27%), but their success has been to the detriment of full price sales (down 15%). Mince prices are down 15p per kilo, but we are still seeing losses of 283,000 shoppers year on year.”

Lamb is seeing the steepest decline with 352,000 fewer shoppers and smaller baskets as younger shoppers (34 and under) buy less lamb compared to last year. Roasting lamb is down with lamb leg (-13%) and shoulder (-23%) key to the overall decline – promotions are low on these joints, showing the potential of discounts to drive seasonal uplifts. Steaks are the other area of concern, with volume sales down 19% as promotions decline compared to last year.

Ward continues:  “Processed meat and poultry also faces challenging market conditions despite Halloween and National Sausage week falling during this period. We’ve seen volumes struggle, with only burgers and grills buck the trend, with an increase in promotions (+55%) encouraging shoppers to pick them up on 4.3 million more trips this year as 1.1 million more shoppers enter the market this year. All shopper groups are driving this growth with families with children aged 5 or over, and empty nesters key to the performance.”

Christmas is round the corner, and we know that the last 8 weeks of the year bring some massive changes to shopper behaviour.  Will we see an early move to the cosy winter warmers we all know and love, or will we see shoppers continue to pull back in the MFP categories? Look out for our next update in 4 weeks time to find out more.