Discounters thrive as consumers choose value cuts

As the recession bites, consumers are trading down to discounter supermarkets and value cuts of poultrymeat, according to John Reed, chairman of the British Poultry Council.

Addressing the South West Chicken Association’s annual conference, Mr Reed said that, while the big three supermarkets, Asda, Tesco and Sainsbury’s, were posting little growth this year, and Morrisons had made a loss, retailers like Aldi and Lidl were on the rise. Waitrose had also bucked the trend as a more upmarket supermarket, posting a “good level of growth”.

“Traditional retailers are the ‘squeezed middle’,” said Mr Reed. He explained that the discounters were stealing consumer spend because of more competitive pricing. “A lot of that is driven by the margin expectations of those companies. There’s no real advantage in terms of their purchase price (for chicken), yet they’re able to sell it cheaper.”

Many consumers had tightened budgets and were watching their spend. “They are seeking out the best deals, either by visiting cheaper supermarkets or buying cheaper product.” Retailers had responded by adjusting their promotion strategy, favouring discounting over multi-buy deals, he added.

These trends were generally good news for poultrymeat, said Mr Reed. Although shoppers still preferred breastmeat – comparable in price to other cuts of meat, such as pork chops – there was a distinct trend of consumers switching to darker meat, and buying more whole chicken.

This presented a real advantage to the industry. “If we can get our consumers to eat more dark meat, then actually we’ll bring more value into the poultry chain.

“It’s trying to get that balance of a bird; if you produce a live bird and sell 20% of the breastmeat, it’s got to carry an awful lot of value to cover the cost of the rest.”

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