CHICAGO (Reuters) - Restaurant-quality T-bone steaks are becoming less rare at U.S. supermarkets as shoppers take advantage of lower prices and meat companies try to make up for slumping sales to dining establishments.
Supermarket sales of beef, pork and chicken are holding up surprisingly well despite a drop in overall meat consumption, according to meat industry leaders attending this week's Reuters Food and Agriculture Summit in Chicago.
In 2008, overall U.S. meat consumption fell about 2 percent from 2007, with beef down about 3 percent, pork down 2.3 percent and chicken down 0.6 percent, according to the Food and Agricultural Policy Research Institute at Iowa State University.
It's a different picture in supermarkets. During the fourth quarter of last year, retail volume sales of beef were up more than 3 percent, while chicken and pork volume rose by 9 percent and 5 percent, respectively, according to the Fresh Look Marketing Group, a research firm based in Hoffman Estates, Illinois.
FAPRI economist Jacinto Fabiosa said restaurant sales are the first to suffer in tough economic times.
"We are really focusing right now on one aspect of our industry -- the retail side," Gregg Doud, chief economist for the National Cattlemen's Beef Association, said at the Summit.
Supermarket shoppers can now find choice-grade steaks, which are commonly served in fine restaurants, selling at $5.00 to $6.00 a pound compared with $7.00 to $9.00 a year ago.
"On the steak side, you are seeing a lot of features for rib-eyes and T-bones at below $5.00 a pound. That is some of the best featuring we have seen in many, many years," said Doud.
In Chicago, choice-grade T-bones were featured at $6.00 a pound, a savings of $3.00, according to an advertisement by retailer Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz).
The beef industry has been anxious to boost supermarket sales to make up for the weakness in restaurants, where about half of the U.S. beef is sold.
"We are working very hard with the retailers right now on summer and early grilling promotion programs," said Doud.
DEMAND OUTSTANDING
Chicken sales have also taken a hit at fine-dining and casual restaurants, Joe Sanderson, chief executive of No. 4 chicken producer Sanderson Farms Inc (SAFM.O: Quote, Profile, Research, Stock Buzz), said at the Summit.
As a result, his company has cut back production of chicken aimed at that segment and focused on supermarket sales.
"Demand through the grocery stores is excellent. It is outstanding," said Sanderson. Continued...
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