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South African retailers have maintained flat margins on lamb and seen declining margins on beef

9 Jul 2015

South African retailers have maintained flat margins on lamb and seen declining margins on beef

  • Beef producers’ share of retail prices has increased from 43% to 45% from 2000 to 2013 while lamb producers’ share has decreased from 55% to 53%
  • Lamb prices have escalated above other meat prices as producers have passed on supplier increases
    • Retailers have been unwilling to cushion these increases
  • Retailers have cushioned an increase in beef producer prices and taken smaller margins
    • Retail prices of beef have risen at a slower rate than producer prices
  • Beef consumption is growing with the rise of the middle class while lamb consumption is declining
  • Demand for beef is higher than lamb due to affordability
    • Retailers are willing to take less margin on beef in order to maintain foot traffic through their stores

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