Beef Growth Reliant on Pricing as Volumes Extend their Decline
CE Scanner data shows centerstore beef dollar sales growth slowing to +9% y/y in the latest 4 weeks ending 6/14 as the category increasingly leans on price (+14%) with volume (-4%) falling for a third consecutive quad-week. With growth now entirely price-driven and volume a headwind, the data suggests signs of consumer fatigue and potentially narrowing avenues for relief within the category, particularly if the branded-to-private-label price gap remains compressed. Centerstore beef volumes seasonally build into the peak grilling months, though the category enters the July 4th holiday from a contracting base, further testing consumer participation.
Chicken Retains its Widening Price Advantage, Volumes Remain Strong though Growth Eases from its Peak
The relative price of beef to chicken widened to 2.4x in the latest 4 weeks, from 2.0x a year earlier, with much of the move concentrated in the spring as the ratio stepped up from 2.2x in March to 2.3x in April. Chicken volumes continue to benefit from a tight cattle supply and elevated retail beef prices, growing +9% y/y, running well above the low-single-digit pace it saw for most of last year. That said, the latest reading eased from the +12% peak reached earlier in the spring, increasing the concern that the cross-protein gap is approaching a level at which further widening yields diminishing incremental chicken demand. Entering the July 4th holiday, the price environment continues to favor chicken, yet the combination of record beef prices, contracting beef volumes, and a potential chicken substitution ceiling suggests incremental softness could develop through decelerating volumes across the complex as the marginal trade-down consumer is increasingly captured.
Notes: Based on Consumer Edge U.S. Scanner Data. Figures reflect year-over-year growth for the 4 weeks ending 6/14. Beef and chicken metrics cover centerstore packaged categories.
