Changing face of retail

The meat supply chain is vastly different today than in the early 20th century. Chloe Ryan looks at how it has changed

When Sainsburys opened its first self-service grocery store in Croydon in 1950, paving the way for the supermarkets of the future, the idea was greeted with scepticism. The Grocer magazine predicted the idea would never take off, claiming traditional counter service would prevail.

The idea that, in just 60 years, the number of butchers shops would shrink to just 6,800 as grocers grew to control nearly 90% of meat sales, was inconceivable. Grocers in the 1950s did a small trade in bacon, but fresh meat was not widely on offer, being firmly the domain of the butcher.

The meat supply chain looked vastly different than today. Back then it was a more fragmented, locally operated industry, with butchers shops in every town and village. Farmers sold their animals at livestock markets in rural towns across the country, with prices published every week in MTJ. Many butchers shops had small slaughterhouses at the back of the shop, and there were also municipal abattoirs, often connected to the livestock markets.

In 1954 meat rationing ended, triggering the start of a big boom in the meat industry. New organisations such as the Fatstock Marketing Corporation (FMC), bought, processed and marketed meat directly from farmers, cutting out the need for livestock markets. It was the start of a process that would see the meat industry become increasingly efficient and more consolidated throughout the second half of the 20th century, with thousands of abattoirs closing, and meat retailing shifting from the high street butchers shop to the out-of-town superstore.

By the early 1960s, the self-service concept was fast gaining ground, and retailers were beginning to stock some fresh meat in addition to bacon. It took some supermarkets quite a while to realise the potential for fresh meat, because of the skills it required to set up a fresh meat offering in-store, says Clive Beddall, food industry consultant and former editor of The Grocer. While some shops opened fresh meat counters, the real impact of the supermarkets on the fresh meat trade came with pre-packing, which started in the 1960s, says Beddall. Pre-packing meat allowed the supermarket concept to take off.

Safeway was one of the first supermarket chains to introduce pre-packed meat, recalls meat industry veteran Royston Hine. The US chain opened its first British store in 1962. At the time Hine worked as meat controller for rival chain Key Markets, which poached some Safeway personnel and, before long, had pre-packed meat departments too.

During the 1960s, Key Markets sent its staff for training in the newly created art of pre-packing meat. The training involved presenting meat in a tray, wrapping it in cling-film neatly, and placing the label in the top corner of each packet, so all the packs looked uniform on the shelf. This was a completely new way of selling meat.

In 1972, Hine was headhunted to become meat controller for a little outfit starting up in the north. Asda, in those days, had meat departments operated by its Farm Stores subsidiary. Hines role was to develop modern meat departments in Asdas growing network of stores. Back then we brought primal cuts into the store from wholesalers then finished them off with butchers at the branch level, he says. Gradually those labour costs were removed from the stores and centralised and through the 1980s, the number of butchers in branch became minimal and it was all done at a central facility.

The multiples, as we know them today, were starting to take shape. Today the supermarkets buy directly from processors who slaughter, prepare and pack the meat, before distributing it to stores via regional distribution centres. Morrisons, which owns its own meat supply chain from the farm onwards, is the exception to this. The whole chain has become more sophisticated, tidier and more effective, says Beddall.

The wholesale industry has also been transformed by the supermarket revolution, and is on a smaller scale than it once was. Back in the 1950s, two wholesale giants, Vestey and Borthwick, imported meat from Australia, New Zealand and South America to supplement British production during rationing. Gradually the influence of the wholesalers waned as the supermarkets grew and started to buy directly, cutting this link from their supply chain.

Throughout the 1970s and 80s, butchers shops closed in their thousands, unable to compete with supermarket prices. Supermarkets were located in town centres, in direct competition with high street butchers shops. Later, in the 1990s, out-of-town superstores started opening, drawing customers further away from the high street. The only way for butchers to survive was to go one of two ways either really downmarket and pile it high, sell it cheap, or the other extreme and go upmarket, says Hine.

According to Beddall, when supermarkets first started selling fresh meat, many independent butchers rose to the challenge, taking on the grocers at their own game. Chains like Dewhurst saw the opportunity to offer canned foods alongside fresh meat, selling things that were the domain of the grocery trade. So they werent giving up the ghost, he says. But that strategy could only work for so long. Dewhurst the Butchers went bust in 1995, along with many thousands of independents.

As the shops closed, many traditional butchery skills also were lost. It used to be a proud boast of the independent butcher that they could buy a whole side and cut it into saleable joints, says Beddall. That skill has disappeared and most butchers now buy pre-packed boxed meat. However, those skills have been retained at the cutting plants. The supermarkets pioneered that need to produce cuts ready for the oven.

In recent years there has been a move by some multiple retailers to put more butchers on supermarket meat counters, bringing back more skill to meat retail. Morrisons advertises the fact it has trained butchers in every store.

The supermarket revolution has transformed the way consumers buy meat. Today, just 7% of fresh and frozen meat is sold through independent retailers [Kantar Worldpanel, 52 w/e 17 February]. The big four supermarkets Tesco, Sainsburys, Asda and Morrisons control 87.3% of meat sales. This is an increase for the supermarkets from even just four years ago, when 8.8% of meat sales were through independent outlets [52 w/e 22 February]. Data from HMRC shows just 6,800 butchers were registered in 2011. In 2000 there were 9,081.

Throughout the 1970s and 80s, consumers sought out similar cuts at the supermarkets that they had bought decades earlier at the butcher. Demand for roasting joints remained high, says Hine, and mince was ever popular, both with consumers and retailers, as a way of making cheap cuts saleable. Today, the demand for roasting joints has declined, and data from Kantar Worldpanel shows roasting beef is now only the fifth most popular meat product in terms of sales [52 w/e 17 March] behind chicken breasts, beef mince, whole chicken and beef steak.

The horsemeat scandal has called into question the security of the current meat supply chain. Hine has concerns that the drive to reduce costs has led to breaches in the chain. Increasingly people who arent real meat men are put in senior positions, because they are good buyers, good negotiators or good managers, says Hine. They have taken some of the expertise out of it and are paying the price. Trying to buy cheaper and cheaper encourages people to do naughty things. There is no doubt there are some criminal elements who have exploited the situation, but the major companies should not be allowed off the hook. If they had been doing their jobs properly, they would have been investigating their sources all the way back. They should also have been doing testing and product analysis. It is very remiss and it is all to do with price.

Despite this, both Hine and Beddall believe consumers are better-served now than before the supermarket revolution, with greater choice and better value. The cuts are better prepared now because of the technology and skills involved, says Beddall. And despite price rises in all groceries over the past decade, meat is cheaper as a percentage of income than it was when the supermarkets came into existence.

Looking to the future, Hine believes the horsemeat scandal will provide a fillip to the British meat industry, as consumers seek reassurance from local, traceable products. And while butchers shops will never exist in the numbers they once did, he believes high-quality independents will continue to thrive and grow.

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