Korean Retail Giant Targets U.S. Beef to Bolster Sales
Melissa Slagle

South Korean retailing giant E-Mart is looking to U.S. beef as one of the key tools to help it rebound from stagnant sales in 2009, and the early returns look extremely positive.

Sales in the big-box retail sector lagged behind general economic growth in South Korea last year, and management at E-Mart has seized on the concept of Everyday Low Prices (EDLP) to help it attract new customers, differentiate it from other big-box competitors and drive sales. U.S. beef is one of the key products E-Mart has identified to adhere to the EDLP program throughout the year.

E-Mart promoted three U.S. beef items – chilled bone-in short rib, chilled chuck eye roll and frozen bone-less chuck short rib – at 123 of its stores between Jan. 15 and Jan. 20.

The promotion was supported by beef checkoff investments and USDA Market Access Program (MAP) funds by conducting sampling of U.S. beef at 30 targeted E-Mart stores and by making purchasers eligible for a drawing to win a trip to the United States to visit a U.S. ranch. In addition, the stores showed commercials from the “Trust” television advertising campaign on screens in the meat department.

U.S. beef was a popular purchase during the promotion, with sales in the six-day period reaching 1.86 billion Korean won (approximately $1.6 million), a 300 percent increase from the previous week.

In addition, the promotion helped U.S. beef rebound versus rival Australian beef. In the fourth quarter of 2009, Aussie beef outsold its U.S. counterpart by a ratio of 79 percent to 21 percent of imported beef sales. During the Jan. 15-20 promotion, U.S. beef outsold Australian beef by a ratio of 57 percent to 43 percent.

“E-Mart prepared this full-scale U.S. beef promotion to expand overall beef consumption that has slowed due to the depressed economy,” says E-Mart Livestock Team Manager Young-sun Min. “With the success of this promotion, we see strong potential with U.S. beef and are willing to strengthen promotional programs.”

During the promotion, E-Mart sold frozen bone-less chuck short rib valued at 1.25 billion Korean won (just over $1 million), chilled chuck eye roll valued at 350 million won (more than $300,000) and chilled bone-in short ribs valued at 330 million won (more than $280,000).

“The willingness of E-Mart to partner with the U.S. Meat Export Federation and feature U.S. beef is a significant development,” says Jihae Yang, Korea director for the U.S. Meat Export Federation, the beef checkoff contractor managing the project. “E-Mart is a very influential retailer, and its long-term plan to feature U.S. beef is a clear sign that the market is more receptive to the message of the quality and safety of U.S. beef.”