Advertisement
Advertisement

Consumers in Canada Walking Away from the Meat Counter as Prices Rise: Op-Ed

Retail industry news delivered directly to you. Subscribe to Retail-Insider.

Unsurprisingly, the cost of living has been one of this election’s top issues. Most major parties have included measures to help Canadians, especially those with less means. However, according to some recent data, consumers are taking matters into their own hands to save a few bucks.

Meat represents a big portion of anyone’s food budget, roughly 20% on average. If saving money at the grocery store is a priority for someone, cutting meat is an easy target. Recent retail sales data suggest that Canadian consumers are already hedging against food inflation at the grocery store. According to some sources, meat sales have dropped significantly this year, especially in the last 12 weeks. Barbecue season is the most lucrative period of the year for the meat trifecta, which includes beef, chicken and pork.

Across the nation, beef sales in volume at the grocery store have dropped by more than 6% since May. Even in Alberta, cattle country, beef sales have dropped by more than 6% since May. It’s even worse for chicken and pork. Sales in volume for chicken have dropped by more than 12%, and pork 17%. In Ontario alone, pork sales dropped 20% this summer. Even if consumers were going out more this summer compared to this last spring, these drops are quite significant as many Canadians are clearly spending less time at the meat counter.

Meanwhile, retail prices are not shifting. While beef prices are up almost 10% on average since January, according to Statistics Canada, pork and chicken are also more expensive, despite sluggish sales. That’s why the “supply and demand” theory many mention when prices go up rarely makes sense at the grocery store. It’s more complicated than that. For grocers, the art of fixing prices in food retail is a blend between protecting margins and set price points based on what grocers believe what the market can bare. Despite lower retail sales, don’t expect prices to drop anytime soon. Higher grain prices, lower inventories and supply chain disruptions are making meat an increasingly expensive choice. 

Historically speaking, beef and pork are highly price-elastic, while poultry is relatively inelastic. In other words, consumers tend to react to higher beef and pork prices and tend to settle for chicken. Chicken is like the tide in meat counter economics. If chicken goes up in price, so will pork and beef because of its demand elasticity. And since grocers know that it is much harder to increase prices when offering discounts for an extended period, playing around with prices at the meat counter is not common practice.

This summer, all three components of the meat trifecta were severely affected by how consumers reacted to higher meat prices. In most stores, even if the “Enjoy tonight” deals, offering some products at 25% to 50% off at times can still be found, the perception that a trip to the meat counter will cost you dearly is now ingrained in many consumers’ minds. Many have been spooked now, and that’s never good business, especially for meat.

In 2014 beef prices indeed startled consumers with a 25% hike in just one month. Many consumers boycotted the meat counter, but only for a while. Sales came back while prices barely dropped. But 2014 was a different protein market. It was before the “Beyond Meat” craze of a few years ago. Most Canadians were heavily committed to animal proteins, mainly because they were not aware of other options. Today it’s different. As most Canadians remain committed to eating animal proteins, they are also game to venture beyond the meat trifecta and settle for other more affordable sources of proteins.

The hard reality for Canadians is this: Eating meat is a luxury in most places around the world and it is slowly becoming one in Canada as well. A harsh lesson of meatonomics for us all.  

Unlike regular meat, sales for meat alternatives have been slightly higher this Summer compared to this Spring, about 4%. Unlike a few years ago, Canadians are more aware of their options beyond the meat counter. An average Canadian family of four can spend anywhere between $2600 to $3000 on meat products in a year now. Reducing a meat budget can make a difference. Canadians won’t give up meat anytime soon, but other options are within grasp.

According to some reports, Canadians are more food literate than before the pandemic. Most of us know more recipes and are willing to get more creative in the kitchen, which in turn may empower many to consider other protein ingredients. If meat is pricing itself out of the market, so be it. Canadians can handle it, at least more so than they used to.

Retail Insider Articles

Article Author

Sylvain Charlebois
Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.

More From The Author

The Rise of the Unassuming QR Code and How it Could...

Sylvain Charlebois says that even though QR codes have been around for almost three decades, a resurgence could become a game-changer.

Consumers in Canada Walking Away from the Meat Counter as Prices...

Dr. Sylvain Charlebois says that eating meat could become a luxury in Canada as various factors lead to meat inflation.

RECENT RETAIL INSIDER VIDEOS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -