5 April 1996

Supermarket price cuts tempt back beef buyers

By Philip Clarke

A GLIMMER of hope returned to the beef market this week as shoppers took advantage of supermarket promotions.

Leading multiple, J Sainsbury played a central role, slashing prices in half last weekend, putting sirloin steak at 246p/lb and silverside at 149/lb. "Every one of our stores had sold out by teatime Saturday," said a spokesman.

Tesco has also been generating sales by discounting heavily on products nearing their sell-by date. "Sales are still substantially down, but at least the reduction has levelled off," said corporate affairs manager David Sawday.

But though Tesco would be renewing its orders with principal supplier, St Merryn Meat, in the south-west, it was also poised to introduce Irish meat as a branded alternative to British beef.

With limited restocking now underway, abattoirs across the country have started killing again, albeit with limited numbers.

David Gunner of the Sims Food Group said production was underway at its sites in Cardington, Beds and Carnaby, Yorks, but he was concerned where the market would settle. "Just by cutting prices in half and boosting sales does not tell us what demand really exists."

John Dawkins of abattoir group Dawkins of Congerstone agrees. "All this shows is that if the price is low enough consumers will ignore the media hype. The problem is we cannot make a profit at these prices and need some kind of support," he said.

But despite these concerns, meat traders are encouraged that beef is at least moving again.

The slightly more encouraging outlook is also apparent from market research carried out by Oxford-based analysts, Nielsen.

The Thursday after the latest BSE scare hit the papers, beef sales dropped 50% on the previous week, it says, but by Saturday (Mar 23) they were down by just 25%.

"But even if the British consumer is more confident in British beef, the industry is still in crisis, as the impact of the foreign ban on exports has yet to be felt," it said.

With home demand down at least 25%, and exports accounting for another 30%, abattoir store-rooms are likely to remain full and thoughputs substantially reduced for the foreseeable future. &#42

Finished cattle are offloaded at the ADM (Charing) abattoir just outside Ashford in Kent on Monday. Just nine were killed that day, the first for over a week, but numbers increased slowly as the week progressed.