EASTER HAM PRICES EXPECTED TO BE LEAN

LAURA KLEPACKI

Retail prices for Easter hams could be at their lowest in years, said meat department executives interviewed a few weeks prior to the April 16 holiday.

Retailers told SN that the past year's record pork production, which has brought more products to market at lower wholesale prices, is expected to force them to drop prices further at a time when hams are typically sold near or below cost.

"It will be extremely more competitive than it has been in a while," said John Story, senior director of meat operations for Fairway Foods, Northfield, Minn., a wholesale division of Holiday Cos., which supplies some 400 retail stores. "The average selling price of hams is probably 30% to 40% cheaper per pound than the same time a year ago."

Some 94 million hogs were slaughtered in 1994, up from 90 million in 1993. This year that number is expected to reach 96 million, according to figures provided by the National Pork Producers Council, Des Moines, Iowa.

Story said retailers "never made a lot of money selling Easter hams. But they will be losing more money this year than they have in the past. I would suggest that we would see bone-in hams sold at prices we saw 20 to 25 years ago."

In the Upper Midwest region where Fairway operates, Story expects bone-in ham prices to fall below $1 per pound. Last year, during the Easter season, the same hams sold for between $1.29 and $1.39, on average, he said.

Bill Vitulli, vice president of government relations for A&P, Montvale, N.J., which operates some 1,100 stores in the United States and Canada, also said he

expects prices to be more competitive this year.

"We anticipate prices to be slightly lower than a year ago for Easter," said Vitulli. "You can be sure that the retails, as usual, for the lead item, will be very competitive. The price has to be very competitive. If one chain comes out at cost or slightly above, we will meet them."

Russ Stevens, meat merchandiser for Buttrey Food & Drug, Great Falls, Mont., a 50-unit chain, also said he expects stores to be fighting to outdo each other.

"I think it is so competitive that all of us have to strive for larger displays," said Stevens. He suggested more products would have to be moved to maintain comparable dollar sales of previous years.

But this season, there may be more in store for shoppers than just excellent prices.

"I think you will see lower prices from last year, but you will also see retailers use some different types of promotions," said Mike Hurley, meat merchandiser at G&R Felpausch Co., Hastings, Mich., a 20-unit company.

"We will be doing something different," he said, but declined to discuss the program with SN prior to April 10, when the company's ad breaks.

Houchens, a 121-store operation based in Bowling Green, Ky., will be emphasizing its own store-brand ham this year in a tie-in promotion, according to Mike Givens, director of meat operations.

Consumers will receive a free dozen eggs for the purchase of a whole Houchens Family Tradition brand boneless ham, said Givens. For a half ham, shoppers will receive a free 2-liter bottle of Coca-Cola.

With the purchase of the Houchens brand country ham, marketed under the Coon Creek Country Ham label, the company will give away a 12-pack of Coca-Cola.

"We will also have demos on the boneless fully cooked hams," said Givens. "We will give out samples and talk to customers" about preparation methods.

While he declined to say what the ham prices would be, he said the company would probably break even on the sale of its store-brand hams, and expected to earn about 10% on its other hams.

Having a hot ham price, said Givens, "is our door swinger. And we are hoping to get more business. With the ham market being as cheap as it is, price is going to be a key factor."

While low ham prices can be seen as a lure to customers, at least one retailer sees them more as a necessary evil. "The goal," said Ray Afred, meat buyer for Hughes Family Markets, Irwindale, Calif., "is not to get people into the stores, but to keep them from leaving.

"What everybody is trying to do is cut their losses. But nobody has come up with a key program that works to get people in, without losing so much money."

Afred said monitoring the competition is crucial. "The prices won't be decided until the week before Easter." He said Hughes has developed several pricing and promotional strategies, but decides at the last minute which to put into effect.

Afred said essentially the same amount of hams will be sold in the market, so, "whoever has the lowest price is going to sell the most."

In some warmer regions of the country, hams aren't necessarily the meat of choice to celebrate the holiday. Houston, for example, is "more of a cookout market than a ham market," said Ron Shernak, director of meat operations for Rice Food Markets there.

Shernak said the 31-store chain would be promoting ham and pork items, but in cuts that could be used on the grill, such as briskets, spareribs and ham steaks. The chain will offer a selection of hams to its customers.