1. ROI GROCERY MARKET REVIEW Period ending 02 October 2011

2. 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.

3. 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

4. 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

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

6. 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

7. 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

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

9. 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

10. 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

11. 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% pt
38% pt
58% NC
+2 million
16% pt
62% pt
22% NC
% Grocery Trips
€ %
€ %
€ %
€ %
€ per trip
Total Grocery 11

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

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

14. 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

15. 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

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

17. 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

18. 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

19. Consumers are taking advantage of promotions

20. % 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

21. 52w % PACKS SOLD ON DEAL – PROMO TYPE Pickup in MultiBuy packs this year, but less Money off and Extra Free promotions

22. Shoppers also
have more choice

23. 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

24. 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

25. Round pricing helps to catch the consumers eye

26. Round Euro Price Points – helping shoppers budget
As shoppers look for value, Round Pricing becomes more popular
% of Branded Sales
% of Branded Sales
% of Branded Sales

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

28. UK Overview

29. 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

30. 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

31. 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)

32. 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

33. 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