‘Steak’ it up: Woolies price cuts see steak sales flying up


SOURCE: theland.com.au

It’s not really rump steak season, but Woolworths’ decision to slash its steak price two weeks ago has sent its sales leaping by 120 per cent.

In the first week of an ongoing major price cutting campaign across its fresh meat and grocery range Woolworths – Australia’s biggest beef retailer – sold an extra 90 tonnes of Meat Standards Australia (MSA) rump steak, now priced at $13.50 a kilogram and boneless blade steak ($11.50/kg).

In fact the supermarket’s total tonnage throughput of MSA beef jumped 20pc in the week after its May 29 announcement that prices were being trimmed by as much as 29pc on four MSA lines, including blade roast and osso bucco cuts.

Last week the big retailer followed up by discounting another another four lines including an 11.5pc cut to oyster blade steak to $11.50/kg and T-bone steak – down 9.6pc (almost $2/kg) to $18/kg.

The discounting offensive precedes Meat and Livestock Australia (MLA) launching its own industry-backed advertising campaign this weekend, promoting beef’s appeal as a rewarding winter meal option.

Woolworths fresh meat division head Andrew Goudie said although rump was always the supermarket’s top selling meat cut, demand had been much better than anticipated.

He said steaks were not traditionally such a big a seller in winter.

Woolworths would be looking at how it could build on the current sales momentum with a spring promotional push to cash in on heightened consumer interest in steak lines in warmer months.

Meat industry analysts say Woolworth’s strategic price discounting move could help trigger a much-needed lift in beef’s share of the domestic fresh meat market by drawing more consumers back to the red meat.

Beef currently holds about 30pc of the fresh meat market, while fresh chicken has grown to 28pc and lamb is around 13pc.

However, with competitively-priced chicken selling at just 25pc the price of some fresh beef lines and slowly chewing into red meat’s traditional market base, the beef sector’s big challenge was lifting consumer confidence in a wider range of beef options, including cheaper secondary cuts.

“Increasing consumer price interest in the category certainly does help encourage people back to beef, said MLA group marketing manager, Andrew Cox.

“But regardless of where retailers decide to set their prices, attracting consumers to eat more beef over the long term is all about getting them to try new meal options.”

Mr Cox said Australians had a “very high cultural preference” for beef, but its higher price point, particularly against chicken, and new competitors such as cured meats and kangaroo were contributing to a sales challenge.

“We encourage retailers to see the value in promoting beef because research clearly shows it is one of the key shopping categories that determines a shopper’s choice of retailer,” he said.

“Retailers have taken notice of this information and are putting a lot of focus on how they present beef to their customers.

“Lower price promotions do provide potential opportunities for growth and can introduce new cuts to shoppers.

“Oyster blade steak is one cut that’s really increased in popularity in recent times as people learn how to cook it well.

Woolworths, which has almost 40pc of the domestic beef market ahead of retail butchers and its big supermarket rival Coles (both with about 25pc), has been keen to promote meat shopper satisfaction by using MSA to provide reliable eating quality guidance.

“It’s scientifically proven that MSA production pathways provide tender meat and better eating quality all the time – and we’re getting greater numbers of repeat purchases because we’re selling MSA meat,” said Woolworths’ Mr Goudie.

Woolworths introduced MSA beef lines to its meat cabinets 14 months ago, expanding into MSA-graded lamb last month – an area Mr Goudie tipped to grow rapidly as supply agreements for its 890 stores across Australia were ramped up.

He said the new everyday pricing discount campaign had drawn a pleasing customer response to the supermarket’s MSA beef offering.

Volumes sold in the MSA category were up 20pc compared to the same week last year, contributing to a 10pc volume lift across the store’s total beef offering.

Although Woolworth’s 16 MSA-graded meat lines had a higher price tag than conventional meat cuts, reflecting the additional quality audit processes required to guaranty the meat’s eating quality, its MSA beef was cheaper today than the same quality cuts would have cost in early 2012.


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