1. Verdict – 27 years of retail research Think Retail, Think Verdict

2. Verdict overview Economic Outlook Shopping behaviour Retailer reaction Food & Grocery Retail in 2012 Inflation & volumes

3. Verdict overview

4. Who we are Our credentials UK market leader in retail research & analysis In-house team of analysts covering all major retail sectors globally Strong relationship with leading retailers & unique in-house data Culture of high quality analysis and independent opinion backed up by robust data Verdict Overview

5. Verdict core output What we do Products and services Sectors Consumers Channels Locations Forecasts News, comment Food & grocery How Britain Shops Where Britain Shops Customer Satisfaction Customer Insight E-Retail Remote Shopping Home Delivery & Fulfilment Click & Collect Neighbourhood retailing Convenience retailing Regional briefs Retail Futures: Annual five year sector forecasts Quarterly two year forecasts by sector + online Daily retail news via e-mail Regular opinion & comment on new stories and breaking news Updates & comment on retailer results Verdict Overview

6. Space Channels New entrants Costs Demographics Economy Housing market Treasury/BOE Item Club, consensus Press, media Consumer trends Retailers Regulation Market sizing & shares Briefings Interviews Results meetings Forecasts Trade associations Govt statistics Historical data Company accounts Retailers Press, media Consumer research How we do it Sector and retailer research - methodology Verdict Overview

7. Recovery from the recession Changes to store development plans Transactional websites High/low growth areas New product areas Changes in price positioning Provide strategic insight… How we do it Trade interviews Verdict Overview

8. Important to have a feel for the retailers you are profiling… How we do it Store audits Price positioning Visual Merchandising Stock Density Fixtures Mix of Product – Sub brands Store format/Ambiance Customers Verdict Overview

9. Economic outlook

10. Economy Yearly GDP view 2009 -4.4+2.1 GDP growth patterns, year-on-year change (%) 201020112012201320142015 +0.7+0.6+1.6+2.3+2.5 Normality Recession Recovery Economic outlook

11. Economy Unemployment (national) Unemployment rate by year, % LFS measure Economic outlook

12. Economy Inflation prospects Inflation forecasts for RPI and CPI RPI measure CPI measure % Economic outlook

13. 2.9%1.9%2.0% Retail inflation rates for 2012 Economy Inflation Economic outlook

14. Economy Consumer confidence index Nationwide consumer confidence index Nationwide consumer confidence index Spending index Economic outlook

15. Economy Household income Real household disposable income (year on year change, %) 2009201020112012201320142015 +1.6%-0.2%-1.2%-0.7%+0.3%+1.1%+1.5% Economic outlook

16. Inflation & volumes

17. UK Food & Grocery Market Market growth Inflation & Volumes

18. UK Food & Grocery Market Impact of inflation on volumes Inflation & Volumes

19. UK Food & Grocery Market What does low volumes mean for retailers? Inflation & Volumes

20. UK Food & Grocery Market Growth of expenditure online vs total Inflation & Volumes

21. UK Food & Grocery Market Growth of sales in convenience vs total Inflation & Volumes

22. Shopping behaviour

23. UK Food & Grocery Market What it all means for shopper behaviour Shopping behaviour Save money Save timeTrade up

24. Retailer reaction

25. Shopper trends What it means for retailers Retailer reaction Be Cheaper Enable Quicker Offer Better

26. Better: Affordable indulgenceQuicker: Top-up shopping Cheaper: Pricing & promotions Retailer reaction

27. Shopper trends Retailer reaction Better – affordable indulgence Polarisation of demand Quality & Freshness Alternative to dining out Respite from austere climate Disposable incomes tight Own label alternatives Price sensitivity

28. Shopper trends Retailer reaction Better – affordable indulgence Quality perception – Cooking from scratch drives demand

29. Shopper trends Retailer reaction Better – affordable indulgence Trading up in own brand – product innovation

30. Shopper trends Retailer reaction Better – affordable indulgence Providing respite from restricted budgets, alternative to dining out

31. Better: Affordable indulgenceQuicker: Top-up shopping Cheaper: Pricing & promotions

32. Shopper trends Retailer reaction

33. Shopper trends Retailer reaction Quicker – more convenient shopping

34. Grocers expansion Top-up shopping Online shopping Further consolidation Space churn New entrants bring innovation Declining sales densities Changing market dynamics for convenience retailers Shopper trends Retailer reaction New strategies for gaining loyalty

35. Shopper trends Retailer reaction Quicker – Growth in c-stores

36. Shopper trends Retailer reaction Quicker – Innovation in convenience food

37. Fresh & food to go focus Click & collect Price focus Engaging with local community Specialisation Insulation from inflation Increased spend in convenience sector Leverage local loyalty Local retailer loyalty Leveraging buying power Retaining over recruiting Grocers Symbols Indies

38. Better: Affordable indulgenceQuicker: Top-up shopping Cheaper: Pricing & promotions

39. Shopper trends Shopper reaction Cheaper- pricing & promotions

40. UK Food & Grocery Market Inflation impacts price sensitivity

41. at round price Price comparison MultibuysMeal Deals Extension of multibuys to meal solutions Price focus Discounting Meal planners & Fuel promotions Culture of promotional activity Shopper focus

42. Shopper trends Retailer reaction Cheaper – price focus

43. Shopper trends Retailer reaction Cheaper – Price comparison & matching

44. at round price Price comparison Shopper trends Retailer reaction - Couponing Cheaper – pricing and promotions

45. Retailer positioning Where they are – and where they are going

46. Thanks for listening