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Insert client logo in master here 1. 2 3 4 Ahold Key Facts 30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries.

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Presentation on theme: "Insert client logo in master here 1. 2 3 4 Ahold Key Facts 30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries."— Presentation transcript:

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4 4 Ahold Key Facts 30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries on 4 continents 350,000 associates

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7 7 THE EMERGING RETAIL LANDSCAPE WINNERS & LOSERS

8 Insert client logo in master here 8 U.S. Retailing: competition from several channels…

9 Insert client logo in master here 9 Research Design Date Source: 61,500 member ACNielsen Homescan  Consumer Panel Primary Channels ­ Grocery (excluding Supercenters) ­ Mass Merchandiser (excluding Supercenters) ­ Supercenters* ­ Drugstores ­ Warehouse Clubs ­ Dollar Stores ­ Convenience/Gas * Includes Kmart, Target & Wal-Mart Supercenters

10 Insert client logo in master here 10 Warehouse Clubs, Supercenters, Dollar Stores & Convenience/Gas continue expansion Family Dollar & Dollar General

11 Insert client logo in master here 11 More large Supermarkets

12 Insert client logo in master here 12 Petro outlets offset declines in Convenience chains

13 Insert client logo in master here 13 Grocery & Mass losing trips * Includes Kmart, Target & Wal-Mart Supercenters Impacted by pace of life, competition from restaurants, & other retail channels too!

14 14 Insert client logo in master here Key Industry Trends Channel Grazing Increased competition for Rx sales Gasoline retailing Frequent shopper program Demand for convenience Niche retailing

15 Insert client logo in master here 15 A new concept: Channel Grazing Clear evidence that consumers take advantage of their channel options ­ But how many retailers or retail channels do consumers include in their shopping mix? ­ Any differences in shopping behavior among light versus heavy grazing households? ­ Does grazing differ by household composition?

16 Insert client logo in master here 16 A new concept: Channel Grazing Over 900 national, regional, & local retailers & retail channels monitored via Homescan panel ­ Households who shopped in “1” to “n” retailers were placed into three groups to define: Heavy grazers: shopped in over 28 retailers/retail channel per year Medium grazers: shopped in retailers/retail channel per year Light grazers: shopped in 18 or fewer retailers/retail channel per year

17 Insert client logo in master here 17 Channel Grazers drive retail sales Total U.S wks ending 12/29/01 – All Outlets

18 Insert client logo in master here 18 Channel “grazing” prevalent in more populated counties Total U.S wks ending 12/29/01 – All Outlets More grazers where there is more variety 74%

19 Insert client logo in master here 19 Channel “grazing” prevalent among couples & families w/older children Total U.S wks ending 12/29/01 – All Outlets

20 Insert client logo in master here 20 Except for Convenience/Gas, females dominate channel shopping trips As males age, they handle increased share of trips Total U.S wks ending 12/29/01

21 Insert client logo in master here 21 Higher basket values for Female shoppers Total U.S wks ending 12/29/01

22 Insert client logo in master here 22 Increased Rx competition – did you know? Rx sales rose 18% to $208 billion in 2001 ­ Doubling sales from 5 years ago ­ Mass sales grew 23% to $8 billion ­ Supermarket sales grew 16% to $18 billion ­ Mail order Rx sales will surpass sales in Independent Drug Stores in 2002 Source: Drug Store News

23 Insert client logo in master here 23 Gasoline retailing – did you know? Share of gasoline sales from high-volume retailers is expected to grow from 5% to between 15% & 20% within four years “Costco testified at a recent public hearing…locations with gasoline have a customer-repeat frequency of four times per month. Locations without gasoline have a repeat frequency of one time per month.” Source: NACS

24 Insert client logo in master here 24 78% of U.S. households participate in a Grocery Frequent Shopper Program But, 63% are in multiple programs! Source: ACNielsen Homescan surveys

25 Insert client logo in master here 25 Competition for Convenience Dual working households, less time for preparation Improved shelf life, refrigerated, convenient products.. “Consumers told us that if it's not easy, it's not eaten.”

26 Insert client logo in master here 26 “Convenience Still Competes” Old Fort Travel Plaza in Ft. Wayne, Indiana added delivery of just about anything (detergent, cigarettes, milk, etc.) along with their normal pizza deliveries This was driven by: ­ increased competition from Kroger & Wal-Mart for gasoline sales “You cannot compete with them on price. They can sell gas at 25 cents a gallon and make it up selling lawnmowers.” Store owner expects to add another 25% on top of their normal pizza sales & drive other foodservice sales Source: NACS Magazine – March 2002

27 Insert client logo in master here 27 Niche Retailing Whole Foods “is the largest retailer of natural and organic foods, with 128 stores” Wild Oats “is the 2nd largest natural supermarket chain in North America, with more than 100 stores” EatZi is a bakery, a market & a restaurant with catering services for all occasions

28 Insert client logo in master here 28 Summary Consumers take advantage of channel options Grocery channel shopping frequency continues decline; Mass declining too Dollar Stores & Supercenters posting strong penetration gains Heavy category buyers purchase in multiple channels; Heavy “grazers” drive retail sales

29 Insert client logo in master here 29 Summary The demographics & shopping behavior of channel shoppers varies by channel ­ Successful Retailers will use this knowledge to target growth via advertising, merchandising and promotional activities ­ Successful Manufacturers will help Retailers and themselves with channel-specific targeting of products and promotions

30 Insert client logo in master here 30 Summary Retailers ­ Alternative channel retailers are coming after your shoppers & their shopping trips invest dollars to re-invent yourselves! ­ Focus efforts against core/heavy shoppers expand products & services to capture greater share of spending frequent shopper programs need to be more than just another deal ­ Initiate efforts to increase loyalty among “key” occasional or light shoppers

31 Insert client logo in master here 31 Offerings that progressive retailers are using to re-invent themselves Drive-thru & Drive-up Indoor food courts Outdoor cafes On-site gasoline pumps Book sections w/seating Leveraging food categories to drive frequency & ring On-line ordering & home delivery Self check-out counters In/Out specialty items Enhanced wine sections Floral departments On-site banking & other financial services Health Food & Health Care sections Cooking classes “Department Store” cosmetic counters Child care facilities Good tasting & variety of prepared foods Photo Processing

32 Insert client logo in master here 32 Summary Manufacturers ­ Capitalize on the channel shopping diversity of heavy category buyers through expanded distribution if you don’t a competitor will! ­ Expand through tailored product offerings, not through increased distribution of existing offerings match product offerings w/channel demographics and/or channel shopping behavior

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