ROI GROCERY MARKET REVIEW Period ending 02 October 2011

Grocery Performance Summary Despite prices increasing (2.3%), the overall market remains subdued with value sales falling by 0.2% compared with this time last year as shoppers are trading down to cheaper products, buying products on promotion. Private Label has remained consistent at around 34.5% of the grocery market since the start of the year . The choice of grocery products has more than doubled since 2001 to over 27,500 products.

Total Grocery market value The market has lost 0.2% in the latest 12 weeks, compared to 1.2% growth in sales for the same period last year -4.5% +0.7% +1.2% -0.2% 52 weeks 12 weeks 3

HOW IS THE TOTAL GROCERY MARKET PERFORMING (PACKS) HOW IS THE TOTAL GROCERY MARKET PERFORMING (PACKS)? Pack sales are in decline over the full year and in the latest 12 weeks also +0.5% -0.3% +2.1% -0.2% 52 we packs 12 we packs

HOW IS THE TOTAL GROCERY MARKET PERFORMING? 4 W/E 4 we €000’s +2.0 -0.3%

Market value, inflation and consumer sentiment Inflation in grocery is running at +2.3% but has no positive effect on value as consumer sentiment dips further Grocery Value % Change and Inflation ESRI Index of consumer sentiment, 3 mth MAV 6

Market value, inflation and household spend Each household is spending 0.25% less than they did last year Grocery Value % Change, HH Spend % Change and Inflation 7

% Markets in Inflation vs Deflation Inflation has slowed slightly vs the same time last year, but the majority of markets still see inflation 8

12 weekly rolling periods Consumer coping strategies How are we adjusting spend when faced with inflation? Promotional purchasing and trading down product tiers drives consumer spend down but volume continues to increase following a period of adjustment What consumers do: Ireland 12 weekly rolling periods Kantar Worldpanel Ireland, 12 w/e 26 Dec 2010

Shopper behaviour drivers The number of shopping trips per household has been increasing since the start of 2011 but spend continues to be eroded with average basket now worth 2.3% less than last year 12 week ending periods

Shopper missions -€4.5 million 4% -0.4pt 38% +0.4pt 58% NC +2 million The importance of full trolley trips has not changed. Instead, shoppers have switched some of their Destination trips to Baskets as Multiples continue to overperform vs. the convenience channel % Grocery Spend -€4.5 million 4% -0.4pt 38% +0.4pt 58% NC +2 million 16% -1.4pt 62% +1.4pt 22% NC % Grocery Trips €21.88 -2.3% €5.58 -3% €13.26 -3.4% €58.27 -2.4% € per trip Total Grocery 11

CHANGE IN VALUE SALES – TOTAL GROCERY SECTORS Food sectors growth is flat this period % Value Change 12

TOTAL FOOD YEARLY AND QUARTERLY SALES -4.0% 1.1% +1.6% 0.5% 52 we €000’s 12 we €000’s

HOW IS THE FOOD MARKET PERFORMING ON TRENDED BASIS HOW IS THE FOOD MARKET PERFORMING ON TRENDED BASIS? % VALUE GROWTH VS LAST YEAR, 12 WEEKLY TRENDED

Grocery Packs Growth by Price Brand Shoppers trading to standard from good and down from Super premium also Growth in Grocery sales (Packs) Change in sales Share of sales 15 12 w/e 02 Oct 2011

Private label still remains an important part of a consumers grocery shop

Private Label Value Share of Grocery 12w PL VALUE SHARE OF TOTAL GROCERY MARKET PL value share is holding above 34% of market value, and has not dropped back after the new year pickup Private Label Value Share of Grocery

Grocery Packs Growth by PL Tier Budget & Standard Private label products see an increase in Pack sales Growth in Grocery sales (Packs) Share of sales Change in sales

Consumers are taking advantage of promotions

% Packs Sold on Deal in Total Grocery, PROMOTIONAL ACTIVITY IN THE TOTAL GROCERY SECTOR A more consistent level of promotion since the new year % Packs Sold on Deal in Total Grocery, 20

52w % PACKS SOLD ON DEAL – PROMO TYPE Pickup in MultiBuy packs this year, but less Money off and Extra Free promotions

Shoppers also have more choice

We now have double the choice we had in 2001 No. of grocery products One of the biggest long terms changes in the market has been the explosion in the number of products available to us to buy. Every 4 weeks we now choose from over 27,000 grocery products – more than a 100% increase over the decade. Despite this the number of products we actually buy has remained relatively consistent, with only a small increase. This shows the increasing importance of shopper marketing. The level of choice on offer has led to the point of purchase becoming a must win battle Latest 12 weeks to 7th August 2011

75 27,558 We actually select Items available to us One of the biggest long terms changes in the market has been the explosion in the number of products available to us to buy. Every 4 weeks we now choose from over 27,000 grocery products – more than a 100% increase over the decade. Despite this the number of products we actually buy has remained relatively consistent, with only a small increase. This shows the increasing importance of shopper marketing. The level of choice on offer has led to the point of purchase becoming a must win battle. It is vital to have a strong on shelf presence to not only make shoppers aware of your brand, but to move them on to consideration and then conversion. Latest 12 weeks to 7th August 2011

Round pricing helps to catch the consumers eye

Round Euro Price Points – helping shoppers budget As shoppers look for value, Round Pricing becomes more popular 2011 19% of Branded Sales 2010 15% of Branded Sales 2009 8% of Branded Sales

PRICE MATTERS ‘ROUND €’ prices have more than doubled since 09 Price Points – helping shoppers manage

UK Overview

MARKET TRENDS SUMMARY MARKET TRENDS PRICE & PROMOTIONS Gap between inflation and market growth narrows to 0.5% Inflation steps up to 5.7% Market growth now up to 5.2%, from 4.6% last period Versus last year, trading down to cheaper products becomes more important. PRICE & PROMOTIONS Full price sales continue to drive Market growth, Nearly all retailers increase promotional discounts year on year. 29

GROWTH AND INFLATION Customers continue to trade down… This chart tracks overall Market Sales Growth with our measure of inflation. Inflation is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers and therefore represents the most authoritative figure currently available.  It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods. Grocery (RST) 12we 2 Oct 2011 (KWP P11) 30

TRADING-UP AND TRADING-DOWN STRATEGIES …mainly through Promotions & Product Choice The difference between household inflation and household spend growth is how shoppers manage their spend – either trading up or trading down. This chart splits out the 4 components of how shoppers can manage their spend and quantifies the difference between inflation and household spend HH Volume Change – contribution from households on average buying more or less volume Store Choice – contribution from households moving spend from / to more or less expensive retailers. We classify each retailer on a simple average price index (inclusive of mix effects) to determine the direction of these movements Promotion Choice – contribution from households buying more/less of their volume on promoted products Produce Choice – contribution from households buying more/less expensive products – e.g. buying a value own label instead of a brand. Grocery (RST) 12we 2 Oct 2011 (KWP P11)

Grocery Packs Growth by Price Brand Shoppers trading down to Budget and Standard Growth in Grocery sales (Packs) Change in sales Share of sales 12 W/e 02 Oct 11

Grocery Packs Growth by PL Tier In terms of Private label, all tiers perform well as shoppers trade down from branded goods Growth in Grocery sales (Packs) Change in sales Share of sales 12 W/e 02 Oct 11