South Korea's three major discount retailers, E-Mart, Home Plus and Lotte Mart, will resume sales of U.S. beef on Thanksgiving Day in Seoul. The retail chains have issued a joint press release announcing the decision and explaining that it is due in part to the slow economy and daily financial difficulties facing Koreans. The companies stated that their sales of U.S. beef will provide value and convenience, as well as help stabilize consumer prices. They added that there is no longer any reason for them not to carry price-competitive U.S. beef.
The U.S. Meat Export Federation (USMEF) is providing promotional support to all the chains and believes initial sales at these three major retailers will prompt sales at other retail outlets. As of late fall, E-Mart, Home Plus and Lotte Mart had 119, 113 and 63 stores, respectively.
USMEF President and CEO Philip Seng noted that although U.S. beef export numbers have been strong since shipments commenced in late July, sales in Korea have been limited to small outlets due to reluctance by major retailers and foodservice operations to sell U.S. beef because of lingering consumer anxiety and weak economic conditions.
USMEF has been actively promoting U.S. beef sales with Korean butcher shops and neighborhood restaurants since early September, but participation by large retailers is critical to jump-starting larger volume sales across all market sectors. The timing of this week's large retailer re-launch is expected to lead other retail and restaurant chains to feature U.S. beef before the lunar New Year peak consumption period in late January. USMEF estimates that 40,000 metric tons (88.2 million pounds) of U.S. beef is currently stockpiled in Korea. This is equivalent to approximately two months of supply at the consumption rates that prevailed prior to the market closing to U.S. beef in December 2003.
USMEF emphasizes that this announcement by the major retailers, though extremely positive, still leaves many challenges in the marketplace.
"Although the decision by these stores to re-stock U.S. beef is very encouraging, we will be watching the consumer response very closely," said Seoul-based USMEF Director Jihae Yang. "The current economic crunch, together with the fact that the Korean won has depreciated almost 50 percent since the market reopened this past summer, will make price will be the key factor in terms of how U.S. beef is received."
Once the third-largest market for U.S. beef, Korea imported about $816 million in beef and beef variety meats in 2003 – the last year the market was fully open. At the time, this represented about 21 percent of the worldwide value of all U.S. beef exports.