US Retail Meat: Grocers Hope To Bolster January Sales

KANSAS CITY - With New Year's holiday features in place and grocery stores ready for heavy shipping activity heading into the final weekend of 2005, U.S. retailers are turning their attention to how to attract more customers in January, a period in which food sales tend to turn slower.

Many people go on diets after the holidays since there is a tendency is to overeat during the festive period from Thanksgiving through New Year's. And what could be an even bigger factor for food sales next month than in years past are higher energy costs. Paying more to heat the homes and for gasoline to get back and forth to work may pinch the food budgets of more households this winter, some meat market analysts said.

Most wholesale and retail sources contacted this week predict that early-January meat and poultry features will focus on the mid- to lower-priced items from each of the three main categories.

Poultry

The chicken category continues to struggle with low wholesale prices and not enough feature activity to generate active sales, analysts and other sources said.

Wholesale chicken prices remain well below a year ago. Bone-in and oneless/skinless breasts are down about 25%, leg-quarters are off nearly 22%, and even wings are down about 24% from the same period last year.

Despite lower feed costs, the weak wholesale prices have trimmed chicken processors' margins from the higher levels they enjoyed last year, the analysts said. However, the major chicken processors so far haven't reduced production levels. The USDA's latest egg-set and chicks placed report showed that the industry placed 2% more broiler eggs than a year ago into the incubators during the week-ended Dec. 24, which is consistent with the figures in recent weeks.

The chick-placed data also showed a 2% increase from last year and up slightly from the average of the previous five weeks.

Source: CattleNetwork.com