Although the lamb and beef at the Co-op is generally fine, there is much better to be had from the local butchers' shops.
Lochalsh Butchers have branches in both Portree and Kyle of Lochalsh. Their meat is, in my experience, unfailingly good. The service is just what you want from a butcher too - the customer is always right. Their prices are very fair for the quality of the meat. My particular recommendation goes to the pork links and the lorne sausage with black pudding. They can be found on the main street in Kyle, and in a portakabin set-up between Howdens and Harbro on the Struan Road out of Portree.
There is also a van from Grants of Dornoch which calls about once a month in each area of the island with a range of frozen, pricey, but first-class meat.