The big question now is whether Loblaws, Sobeys and Metro will try to recover beef margins by increasing prices.
Grier said he doubts any of them will feature beef in weekly sales flyers and said they will be worried that Walmart and Costco may hold their beef margins tight.
What happened after COVID-19 hit resulted in a decline of more than 60 per cent in beef packing production from the end of March to May 2.
“The big declines in beef production drove the grocer’s costs to record levels,” Grier says.
“For the most part grocers absorbed those cost increases and did not pass them along to consumers,” he said.
Grier is a veteran analyst of supermarket food marketing , corporate food processing and farm production.
He said it’s surprising that the retailers were able to keep beef stocks available throughout the pandemic.
There were empty shelves in the beginning, but not because beef production had declined then, but because shoppers were hoarding, just as they did with toilet paper and flour.
“Looking back and a little bit forward, it can be easily argued that the beef supply chain performed very well during this very stressful pandemic. Despite that strong performance and the grocer’s role in keeping supplies balanced, they have been blamed for hiking prices. Nothing could be further from the truth,” Grier wrote in his market observations.
That said, retail beef prices did increase by about 8.5 per cent in April.
