Confidential & Proprietary Copyright © 2007 The Nielsen Company Private Label Report PLMA A review of Private Label purchasing behaviour by Australian Grocery Shoppers

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Opening Quiz When was Australia’s last recession ? – Around 1990 – Around 2000 – When Warnie retired – Before I was born 1990/1991 But 2000/2001 was awfully close to the popular definition

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Opening Quiz What % is Petrol of total HH consumption? – 0-10% – 10-20% – 20-30% – 100% 3%

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q What we’ll review… High level review of the Australian Economic Story – Economic benchmarks and implications How Consumers Have Changed – Their mood & how they are spending their money Key Stories for 2009 – Private Label growth and implications The 2008 Private Label Report – Share development by Retailer Chain – Category Highlights Private Label Report Q1 09 – Key drivers and Implications

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Nielsen Consumer Assets Employed Nielsen Homescan – Data through to December 2008, Australia’s demographically and trade balanced longitudinal consumer panel. Nielsen ScanTrack – Data through to December Retail sales sourced from over 50 retailers. Includes Homescan-fused data for ALDI – Australia’s fastest growing grocer. Nielsen Global Confidence Survey – 2008 Bi-Annual 40 country survey of consumer sentiment and outlook Nielsen Shopper Trends Report – 2008 Annual study of drivers of consumer retailer choices and shopping repertoires Nielsen Retail Barometer – January 2009 online survey of FMCG Industry executives Partner Support : Macquarie Bank Economic Team – Inclusive of Australian Bureau of Statistics Data – Data to dates as specified.

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q The Private Label Report April 2009 The Australian Economic Story

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Outlook Declining GDP Outlook for 09/10 – 1-2% appears to enjoy good consensus among economists – Important development is forecast declines in the commodity- driven growth states of QLD and WA Rising Unemployment – From close to historic lows – Atypically led by professional labour groups rather than blue- collar Inflation declines overall – Food CPI still strong however - in part due to fresh prices

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q What We’ve Learnt Economic Outlook is challenging – However retail, and food retail in particular is less likely to feel the effects as other parts of the markets Consumers are Changing their Shopping Habits – More stores, more private label, more cooking at home and more focus on stretching their budget by shrewd buying. FMCG environment has opportunity – CPI increases are encouraging, if you can pass your price rises on Your Route to Market is broader – Independent supermarkets and ALDI are performing well. If ALDI is not a customer, your route to market is smaller Private Label is now entrenched in more FMCG categories, with over 2 dozen categories now in transition – Last 12 months figures are your strongest call to action yet to generate consumer-based insights on your brands role in your retailer Specialist fresh stores are under pressure as the economy drives consumers back to a one stop shopping

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q What are the implications? There are some reassuring signs for business forecasts – CPI increases helps drive growth – Supermarket retailing offers some insulation from broader economic malaise Growth states of QLD and WA will slow – This may force a review of state growth forecasts for suppliers The success of independent and ALDI supermarkets means that route to market opportunities exist – Mass, Convenience and online also potential plays Branded product will be tested (again) in 2009 – Consumer-led retailer relevance and promotional execution will be critical for profit protection and growth Opportunities for fresh, and potentially packaged or frozen alternatives in supermarkets if you play in this space

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company How Consumers Have Changed Their mood & how they are spending their money

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Consumers are increasingly value conscious, changing HOW they shop You mentioned you became more price sensitive, how does that affect your purchase expense for grocery products? 59% - I actively look for promoted products 50% - I buy less treats 32% - I buy less ready meals / instant cooked foods 40% - I combine trips and errands 54% - I only buy the essentials 42% - I buy store Own Label brands 33% - I buy products in bulk 25% - I read store leaflets and decide which stores to go to Source: ShopperTrends; Base : All Supermarket (n=1417)

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Grocery spending in last quarter shows excellent growth: coincides with strong CPI & stimulus package Source : Nielsen Consumer : Homescan Shopper Behaviour vrs YA 2008 Visits per household fell throughout 2008, while basket sizes increased. Strong growth in visits, frequency, basket size & retail value in final 8 weeks of the year

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company ALDI now accounts for nearly 6% of total grocery sales in Australia & 10% on the Eastern Seaboard Source: Nielsen Consumer : Homescan

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company 14 Increased store counts help ALDI to source 22% of its value gains from other retailers Retailer Switching Dynamics National – 26 WE 27/12/08, Based on dollars – Defined Grocery incl Fresh Other Supermarkets Source: Nielsen Consumer: Homescan

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Why do Australians love ALDI? Low Prices and Value for Money 1.Store is cheaper (55%) 2.Food & Groceries are Good Value for money (53%) 3.Prices have increased: CPI impact (23%) 4.Provides their own brands of groceries which are a good alternative to the main brand (37%) 5.Convenient to get to (30%) Why are you spending more than you were 6 months ago at ALDI? Top 5 Reasons Source: Homescan March Survey 2009 n=446 Based on those consumers who stated that they were spending more in-store in the latest 6 months 14% of panellists cited Quality of Fresh Food as the driver for increased spend in ALDI

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Key Stories for 2009 Private Label growth and implications Key Stories for 2009 and 2010 Private Label Growth & Response

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label & Proprietary Category Landscape % Value Share of Category Entrenched Transitional Infancy Source : Nielsen Consumer: Homescan (All Category Purchasing All Chain, Independent & ALDI) Infancy categories are those with less than a third of their value in Private Label or Proprietary Labels Entrenched categories are those with over two thirds of their value in Private Label or Proprietary Labels Transitional categories are those with between a third and two thirds of their value in Private Label or Proprietary Labels

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Entrenched Transitional Infancy Packaged Cakes Eggs Party & Picnic Ware Milk Packaged Bread Seasonal Confectionary Oil, Canned Fruit, Packaged Smallgoods, Cooking Needs Pet Food & Care Snack Food, Rice Confectionery, Biscuits Private Label & Proprietary Category Landscape % Value Share of Category Source : Nielsen Consumer: Homescan (All Category Purchasing All Chain, Independent & ALDI)

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Entrenched Transitional Infancy Canned Fruit 2008 Private Label & Proprietary Category Landscape % Value Share of Category Canned Fruit point shift in 12 months Source : Nielsen Consumer: Homescan (All Category Purchasing All Chain, Independent & ALDI)

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Entrenched Transitional Target Seasonal Confectionary 2008 Private Label & Proprietary Category Landscape % Value Share of Category Seasonal Confectionary point shift in 12 months Source : Nielsen Consumer: Homescan (All Category Purchasing All Chain, Independent & ALDI)

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company The 2008 Private Label Report Share development by Retailer Chain Category Highlights

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Executive Insights Consumers continue to shift their spend toward PL as they become increasingly aware of the reality of the Global Crisis. – Households spending close to 15% more on PL this year Private Label (PL) performance is a bright spot for grocery retailers in the midst of difficult trading conditions – PL Shoppers remain constant in Q4 to Q3 Shoppers are proving more loyal to PL over time but it is questionable whether this is driving loyalty to the retailer – Aldi’s offer is appealing to both Coles’ and Woolworths’ PL shoppers – Aldi has increased its draw on Households by a further 172,000 – Woolworths and Aldi is winning share away from Coles – Coles has cannibalised its manufacturer branded offer Appeal of PL has increased universally although growth is strongest within the dairy case, confectionery and basic meal requirements – Shoppers seem to be looking for value across their whole basket

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Households spending close to 15% more on Private Label brands than at this time last year… +14.7%

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q ALDI - Contributing strongly to PL growth. Avg Household spend up 10% in Q4 vs YA, and new store openings bringing over 300k+ more Australian households through the doors Aldi Store numbers reported for final month of quarter 200+ Read as: 93.4% of ALDI sales is PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Aldi’s growth continues to be dominated by customers’ switching their spend from other retailers Even existing ALDI PL buyers are spending more in-store

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Aldi remain a key threat to Woolworths and Coles’ ability to develop customer loyalty through their own brands A high index suggests that the switching from WWs & Coles PL is larger than we woud expect given their share of the Aust market

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Woolworths – Similarly, Avg household spend up 10% on YA, helping to lift PL sales, however buyer numbers are down slightly

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Growth for WWs PL a combination of existing customer base increasing spend more and stealing from the competition

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Woolworths are successfully driving higher gains from Coles than the cannibalization impact on their manufacturer branded business

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Coles – Despite buyer numbers flat, average spend up 12.4% on LY, resulting in 1pt share increase for Coles PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Coles growth coming primarily from existing shoppers spending more, whilst some growth being off-set by shoppers switching (mainly) to ALDI

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Suppliers won’t be too pleased to learn that Coles PL is cannibalising their products in stores, whilst ALDI picking up a major share of switching losses 1.3/2.8 = 46% of losses going to ALDI PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q IGA missing out on increasing their shopper spend, like the other major retailers have achieved. On a positive, IGA is seeing a slight uplift in buyers

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Increased penetration accounting for 50% of IGA PL growth. Remaining coming from existing buyers

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q IGA doing a good job to steal from Other SM branded, yet this has been off- set by shifting to Coles PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Conclusions Despite Woolworths PL penetration falling in Q4 they continue to build steadily TY on LY. They are successfully winning custom from Coles (both PL and branded). With the PL penetration getting stronger Coles have managed to increase the average spend by 12.4% Q4.Despite having bigger losses in Q4 than Q3 to Woolworths and Aldi. Amongst the smaller chains PL market share has remained constant in Q4.

Confidential & Proprietary Copyright © 2007 The Nielsen Company Private Label Report Q1 09 Homescan Date to 21/03/2009

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Household PL spending is up 7.7% on this time last year. While Penetration is down slightly by.2% on LY

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Aldi HH spend drops 2% on LY, but penetration is up by 1.2%

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Aldi growth continues to come from customers switching from other retails

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Aldi’s growth predominately comes from Coles Branded followed by Woolies Branded customers

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Woolworths HH Spend is up by 6% on this time last year while penetration is by 1.1%

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Woollies PL growth comes predominately from switching and their own PL customers spending more

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Woollies switching growth comes from Coles Branded and PL while they lose they still lose customers to Aldi

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q PL share as a % of Coles Sales is up 1.2% on LY and their Average spend is up 5.6%

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q …….But over all Coles are losing PL sales with switching, yet they are managing to convert their existing PL customers to spend more.

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Coles PL customers are switching to Woolworths branded, Aldi PL and gaining from Coles Branded

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q IGA PL average spend is up $1.40 on LY or 4.9%.

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q IGA Pl growth is coming from.8% customers switching to IGA PL and 1.7% growth in their own PL customers spending more.

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q IGA is gaining PL sales from their own branded but some gain is offset to Woolworths Branded and PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q PL Highlights Aldi is stealing sales from both Coles and Woolworths Branded customers. Woolworths is gaining sales from Coles Branded and PL customers Coles is not only losing sales to Aldi and Woolworths but is successfully switching their own branded customers to PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Who’s getting Who’s Customers? Retailer Switching Dynamics National – 26 WE 27/12/08, Based on dollars – Defined Grocery incl Fresh Other Supermarkets Source: Nielsen Consumer: Homescan

Confidential & Proprietary Copyright © 2007 The Nielsen Company Private Label Report Customers attitudes toward PL

Confidential & Proprietary Copyright © 2007 The Nielsen Company In the last month have you bought any Woolworth Select, You'll Love Coles or any other store branded products? – Yes 81% – No 16%. Compared to one year ago, would you say that you have bought more or less store branded products in the last month? – The same 50% – More 37% What are Customers attitudes toward PL

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Perceptions of Private Label overall have not changed significantly over the years, generally consumer believe they are as good as branded

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q However younger shoppers in particular claim to be more positive about PL now vs 5 years ago showing that PL has kept pace with brands

Confidential & Proprietary Copyright © 2009 The Nielsen Company Ref: Q62a Base : All Supermarket (n=1432) Awareness Level of Private Labels Awareness levels vary considerably, with the WW Select scoring highest out of the newer PL’s

Confidential & Proprietary Copyright © 2009 The Nielsen Company Awareness Level of Private Labels Ref: Q62a Base : All Supermarket/ (n=1432)..and Coles Finest awareness reaching one in ten shoppers, organic ranges also being recalled

Confidential & Proprietary Copyright © 2007 The Nielsen Company If you have bought more PL than a year ago why you have bought more? Cheaper Price – 71.9% Improved Quality – 40.7% Increased PL Choice – 18.3% #% Respondents526 Price/ Cheaper Improved Quality Increased PL Choice Increased PL Availability112.1 Stores replacing with PL315.9 Better packaging/ appearance142.7 What are Customers attitudes toward PL

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Implications for You Question: How are you responding to the changes in private label? Need for a tailored response by category… What’s your “something special”?

April 3, 2009 Confidential & Proprietary Copyright © 2009 The Nielsen Company Implications for You Critical to develop internal understanding of the role of your categories within each retailer – Defined by consumer needs and engagement Opportunity – Fresh Foods – In Home Solutions – to promote entertainment/eating at home solutions – Including cook from scratch solutions – Imperative is to locate key communication moments pre-store and instore by category by occasion

Confidential & Proprietary Copyright © 2009 The Nielsen Company Private Label Report Q Thank you Confidential & Proprietary Copyright © 2007 The Nielsen Company