LOW PRICES BOOST SALES OF CHICKEN

JULIE GALLAGHER / ROSEANNE HARPER

NEW YORK - Bargain prices are driving up chicken sales, according to retailers interviewed by SN.

Chicken prices have been dropping sharply, in response to falling demand in foreign countries where bird flu has cropped up. While some reports noted retail prices have not fallen at the same speed as wholesale prices, retailers insisted their customers are benefiting from the reductions.

"Food Lion is paying less for chicken and we're passing those savings on to customers," said Jeff Lowrance, spokesman for the Salisbury, N.C.-based retailer. "Retail prices have been lower for several weeks now. Customers have seen great bargains for Memorial Day weekend cookouts."

Last week Food Lion was selling chicken leg quarters purchased with a shopper's loyalty card in at least one Florida store for 39 cents per pound, 79 cents if purchased without the card. At least one Pennsylvania location offered Perdue boneless chicken breast for $2.79 a pound with the loyalty card and $4.99 per pound without the card.

"Chicken sales are generally strong in our stores," Lowrance said. "The lower prices make fresh chicken an even more attractive protein choice."

Each week Publix Super Market stores feature a different chicken part alternating between breasts, thighs and legs. During the week leading up to Memorial Day, the Lakeland, Fla.-based retailer offered Publix drumsticks or thighs for 99 cents per pound.

"Chicken prices have been lower for the past eight months but I don't know that they've been drastically down," said Publix spokeswoman Maria Brous. "Any time we save we pass that along to the customer."

Cutting prices, while taking a little more margin, New York City-based Morton Williams Associated is selling a lot more chicken this spring.

"We've lowered prices and we're making more money," said Richard Travaglione, vice president, meat/deli operations and senior buyer at the 10-store chain. "In tonnage, we're up a good 20% year-to-date."

During the week leading up to Memorial Day, the chain featured a combo pack of 18 parts for 79 cents a pound. A year ago, the retail would have been $1.19 with less margin, Travaglione said.

The chain was selling leg quarters last week for 69 cents a pound retail, down from 99 cents a year ago.

"The wholesale two weeks ago was 19 cents for leg quarters. Now it's come up some, to 25 cents," Travaglione said.

The glut won't last, however, and prices are moving up, one retailer noted.

"Processors are taking measures to cut production and wholesale prices are starting to creep up," said John Gerlach, meat buyer, at three-unit Stauffers of Kissel Hill, Lititz, Pa.

"A couple of months ago, we had 10-pound bags of boneless, skinless chicken breasts on special for $1.48 a pound," he continued. "We could do that because we got them for a sharp price. And at that retail, we sold a record volume, up 25%-30% [in tonnage] over any comparable week in the past three years. The retail price, with us taking a fairly skinny margin, drove sales."

Two years ago, the retail price on those bags was about $2 a pound, he said. Wholesale prices right now are edging up again. In fact, Gerlach said, as of last week, the wholesale price was close to $1.48, nearly matching what he sold the breasts for earlier this spring.

For the week leading up to Memorial Day, the retailer had grade-A boneless, skinless breasts in a tray pack on sale for $2.99 a pound. The regular price is $3.69.

Gerlach's costs for white meat have been down slightly over the last year, about 5%-10%, he said.

While there have been good deals at wholesale on dark meat chicken parts, he hasn't taken advantage of them.

"This is a white meat market, more affluent and health-conscious," he said. "It wouldn't matter how super a price I put on dark meat parts, I wouldn't know what to do with them, because I couldn't sell them."

For a limited time, Weg-mans Food Markets isoffering boneless breasts at $1.79 a pound, down from the regular price of $1.99. The Rochester, N.Y.-based retailer was advertising the special on the front page of its store circular.

Prices at Boulder, Colo.-based Wild Oats Markets have not been affected.

"Since the only chicken we sell is a natural chicken with higher standards than [U.S. Department of Agriculture] natural standards, there is not a surplus of animals," said Wild Oats spokeswoman Sonja Tuitele. "Since it costs more to raise these birds, suppliers typically grow their flocks to past history of usage. Therefore, we haven't experienced the same low prices or costs that the conventional stores have."

Bell & Evans whole fryers or chicken legs were being featured at Wild Oats' Princeton, N.J., location for $1.89 per pound.