Dive Brief:
- Despite lingering concerns over deflation, retailers are heavily promoting their meat selections heading into the summer season, according to Supermarket News.
- Albertsons is promoting more value-added offerings this summer, including a larger emphasis on natural, organic and local meats. Selections like kabobs and stuffed burgers are also getting more promotional emphasis.
- Although meat accounts for just 11% of store sales, it often encourages shoppers to build bigger baskets, according to industry analysts.
Dive Insight:
After years of climbing prices and low volumes, meat departments have experienced the inverse lately. Food deflation has cut into retailers' margins. On the positive side, it has stoked demand that could drive major sales gains once the deflationary environment eases — which analysts believe is already starting.
Numerous studies show that demand for meat is high across demographics. Packaged Facts recently released a report speculating meat will remain a protein powerhouse, despite challenges from plant protein alternatives, while the Rabobank Food & Agribusiness Research and Advisory group found meat consumption on the whole posted its largest increase in 40 years. A study by Midan Marketing revealed that millennials represent the largest generation of meat buyers, shelling out $75.4 million over the last year.
Retail meat departments are going all out this summer to highlight grilling season and drive sales of value-added meats. These have become increasingly sophisticated in recent years, and allow retailers to put a signature spin on burgers, steaks and other offerings. Cross promotions also seem to be big this year as a way to highlight grilling accompaniments, including produce and condiments.
The hope for many retailers is that accelerating demand, rising prices, and the summer season will create a perfect storm that will lift not just meat category sales, but sales throughout the store as well. That's certainly possibility, given meat's ability to build bigger baskets. And it may be essential for many stores struggling to compete in a fresh-focused retail environment.