4Consumer Confidence continues to erode, with bleak outlook for coming year Manufacturer Outlook is divided, but pessimistic about current trends and activitiesRetailer Relationships are being damaged by perceived power and cost imbalancesTrade Spend is reaching saturation point and no longer delivering on its promise
538%of consumers think we are in a recession – 6% more than in Q39%of manufacturers feel that business conditions have declined since this time last year65%feel they need to cut back on Trade Spend, compared to 38% who see it boosting ROI.25%of manufacturers consider their relationship with Woolworths to be “Poor” or “Very Poor”.
6THOSE who feel we are in recession has doubled since the same time in Q4 2009 First time confidence has been below 100 at year’s endCall out for presenter: what is odd about this slide? Why is confidence lower than post-GFC?Q: Do you think your country is in an economic recession at the moment?Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012
7People perceive Future job prospects to be bleak almost doubling compared to Q4, 2010 Q: What are your perceptions of Local Job Prospects over the NEXT 12 Months?Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012
8This is Compounded by cost of living pressures and health concerns Health ties into money woes – could it devastate you.Q: What are your major top two concerns over the next 6 months?Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012
10Australia continues to experience a slowing rate of FMCG price inflation, which is a recurring pattern in other countries in the region.AustraliaFast Moving Consumer Goods market dynamics | Scan DataNielsen Scan Data based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. In most cases this reflects 60 – 80% of all Longlife categories. For Australia, this is 75% of categories.
11Regional Summary (Quarter 4) The region continues to see strong growth, with volumes up 7% and overall dollar sales growth of 12.7%Regional Summary (Quarter 4)Fast Moving Consumer Goods market dynamics | Scan DataNielsen Scan Data based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. In most cases this reflects 60 – 80% of all Longlife categories. For Australia, this is 75% of categories.
12Supermarket $ Growth 2.5% excl PL/Tobacco Suppliers$ GrowthTop 5+1.5%Next 100+3.6%Top 101 – 200+7%$122M$663MAbsolute contribution to $ growth is about the same for the Top 100 versus next 100 suppliers!$92MSource: Nielsen | ScanTrack Australia MAT to 23/12/2012 vs Yr AgoRetail Barometer
1387% will change promotional activities 2 out of 5 will change depth3 out of 5 will change frequencyOnly 1 in 6 will change number of items on promotionMfr’s seem to think so with 9 out of 10 indicating they will take action to adjust components to reduce trade spend or at least make promotional tactics a amjor focus going forwardSource: Nielsen Retail Barometer, Q4-2012, Base: All respondents (n=92), Field Dates: November , 2012
14Coles Aldi WW is leader on consumer focused activities. is leader on strategic, and manufacturer focused activities.Aldiis leader on supply chain.WWSource: Nielsen Retail Barometer, Q4-2012, Base: All respondents (n=92), Field Dates: November , 2012
15in-market success as Coles continues to close the gap on woolworths 38.2%+ 0.129.0%+ 0.57.7%- 0.57.6%+ 0.6Market Share % by Retailer 2012 (vs. 2011)Source: Nielsen | Homescan, Total Australia, MAT to15
16RETAILER GROWTH % AHEAD OF TOTAL AUS Coles enjoying broad success across all socio-demographic clusters followed by aldiRETAILER GROWTH % AHEAD OF TOTAL AUSFamiliesSingles & CouplesHigh IncomeMed IncomeLow IncomeHIGHIncomeDensityLOWIncomeDensityTotal $ Growth AUS: +5%Total $ Growth WW: +3% Total $ Growth Coles: +8% Total $ Growth IGA: -1% Total $ Growth Aldi: +23%Retailer % Growth Vs Total AUS – 2012Source: Nielsen | Homescan, Total Australia, MAT to16
18% Value Share of Private Label to Total Packaged Grocery Sales Private Label has gained an increase in Share in WOW.Small decrease in PL Share for Coles.Branded products highly increasing their share in Aldi% Value Share of Private Label to Total Packaged Grocery SalesGrowth stronger vs last Xmas quarter but tapering off for Coles PLWwProduct T Grocery, T. P LabelMK AuS, coles, ww, aldiWW PL as a % of Total Aus T Grocery18
19Families Share on Private Label Trended, Total Supermarkets Start up families increasing their spend on private labels faster than other demographic groupsFamilies Share on Private Label Trended, Total Supermarkets
20CUSTOMERS BUYING MORE , PENETRATION INCREASES and overall SHARE increasing AWOPPL VAL Share+4.6%+2.8%-3.4%+0.0%+8.4%+6.0%+1.0%+2.1%+0.9%Penetration - %chg v YAAWOP - %chg v YAPL VAL Share – % chg in PL Share (Value Market Share for Total PL)-4.2%-6.0%-5.6%Source: Nielsen | Homescan (Australia) – Issue# /600654Homescan QTR to 26/01/2013Q Nielsen Private Label Report
21WHICH PRODUCTS DO SHOPPERS WANT IN PRIVATE LABEL
22There are 20 categories which account for 50% of the Heavy Private Label Buyers spend over a year in AustraliaShopping listPet FoodCoffeeMilkIce CreamBlock CheeseConvenience FrozenSoft DrinksMedicinal ProductsBiscuits And CookiesFrozen VegetablesChilled DessertsVitaminsConfectioneryToilet PaperCerealChilled SpreadsSnacksHeat And Eat FrozenPackaged BreadIn store Bread8Purchased in National brands5Purchased primarily in Private Label7Promotional Vulnerable PL
24… to purchase Food, Grocery and Toys Attitudinal, Media and Lifestyle pen portrait of a Heavy Private Label BuyerThey keep an eye on their children eating habitsThey like to try new brandsThey watch family movies togetherIn-Store advertisement influence their purchase decisions… to purchase Food, Grocery and ToysThey use internet …
26Christmas Themes Strong Christmas Theme: Fun and Lowest Prices Fresh and ValueAll Your Needs for ChristmasStrong Christmas Theme:Quality and FreshAll Your Needs for Christmas
27Aldi performing ahead of expectation over the Christmas period. Christmas Shopper trends37.7%29.0%8.1%Share of Trade-4.9%+14.3%+143.8%Growth in Media SpendAt which of the following supermarkets did you complete the majority of your Christmas shopping?1st (28%)2nd (24%)3rd (14%)Thinking about your overall experience (including out-of-store marketing), who do you think should ‘win’ the best Overall Supermarket for Christmas 2012?1st (37%)2nd (30%)3rd (10%)Share of Trade: Source: Nielsen Homescan, 13 weeks to 29/12/2012. Media Spend: Source: Nielsen Media, 8 weeks to 29/12/2012, data derived from free-to-air channel rate cards after discounts applied. Discounts are derived on a per advertiser basis, based on industry body information. Nielsen aims for this measure to be as accurate as possible, but deviation from the total universe may occur. Shopper Trends: Source: Nielsen Customized Research (CR), based on January telephone survey from a CR Panel (separate to the Homescan panel) (n = 3007 for location of shopping question, n = 3358 for best supermarket winner question).
28Christmas Shopper trends Aldi’s performance over Christmas has been driven in some area’s that aren’t traditional Aldi strengths.Christmas Shopper trendsWhich of the following reasons describe why you chose to shop at your chosen retailer for the majority of your Christmas shop?Shopper Trends: Source: Nielsen Customized Research, based on January questionnaire (n = 2953).
29Switching: Total Business (rolling quarters) While switching to Coles and ALDI has tapered back, the switching to these two retailers was worth $53m in lost sales in the Christmas Quarter.Switching: Total Business (rolling quarters)Lost sales = $53mSource: Nielsen Homescan
30WOW shoppers increased their spend in WOW stores, but lagged behind Coles (by $4.50) and ALDI (by $3.70).Shopper key metricsMore shoppers in stores(+0.7%)Shoppers spending more in Total Quarter(+$15.30)+0.0%+$19.80+2.5%+$19.00Shoppers visiting less frequently(-0.1%)Shoppers spending more per visit(+$1.10)+0.1%+$0.40+0.2%+$0.50Time periods are 13 weeks to week ending 29/12/2012 vs 13 weeks to week ending 31/12/2011. Source: Nielsen Homescan
32Perceived % Value on Promo ALDI stocked more branded items this Christmas than ever before – offerings which were on average 75c cheaper than WOW and $1.19 cheaper than Coles.Retailer share amongst Aldi’s branded Christmas stock-7.8%The New ALDI BuyerPenetrationAWOP ($)Avg Price ($) Per UnitPerceived % Value on Promo20112012+/-Australia76.583.26.721.8425.143.304.374.480.1148.952.13.1Woolworths45.9126.96.36.19916.730.014.32-0.1550.752.8Coles38.5188.8.131.5218.182.374.204.760.5748.656.78.1ALDI0.016.80.0011.363.5724.4Time periods are 13 weeks to week ending 29/12/2012, 2011 to week ending 31/12/2011, 2010 to week ending 01/01/2011. Source: Nielsen Homescan
33ALDI’s New Shoppers demographic profile The new ALDI shopper is predominantly families, notably Small Scale Families. This links in with the longer term trend seen at an All Shopper level, where families are switching out of WOW and into Coles and ALDI.ALDI’s New Shoppers demographic profileFamiliesMain Shopper <44yoMedium Income HHsTime periods are 13 weeks to week ending 29/12/2012, 2011 to week ending 31/12/2011, 2010 to week ending 01/01/2011. Source: Nielsen Homescan
34Aldi 300 stores 50% of household’s shopping 10% share of eastern seaboardStrength is priceRange = 1200 itemsBasket size is 90% of WW / ColesStrong in freshSkewed towards familiesStrongest rel’ship with suppliersBrightest future according to Aust. SuppliersPlans to open in South & Western Australia300 storesWhy wait – why not launch your own equivalent?50% of household’s shopping
36Summary of trendsConsumer and Manufacturer confidence continues to erode, with bleak outlook for coming year.Coles & Aldi winning in the market – both attracting Woolworths key shoppersPL continuing to grow in the Australian market, but growth slowing as market becomes more maturePrivate Label growth opportunities increasingly focused on more premium non- traditional areasBalancing both Private Label & Branded important to retailers in winning ChristmasAldi growth into SA & WA likely to increase the acceptability of Private Label within the Australian market