Tracking Trends That Matter

Tracking Trends That Matter
Rate or pace of change in our industry has been running at an incredible speed and it just keeps accelerating. The title of my session, “It’s okay to look in the rear-view mirror, but what’s more important lies ahead”, is easier said than done. We use the past to predict the future, but history is not always a good predictor for the future. Nevertheless, companies that are not investing in the future will be short-lived. Todd Hale Retail Insights Thought Leader Principal, Todd Hale, LLC March 4, 2018

Retail Landscape & Performance
So what is the overall sales trend within fast-moving consumer goods? What publically traded retailers and restaurant chains are winning the battle of same-store-sales growth? What retail channels will experience the greatest growth out to 2020?

Growth returns to Europe in last two quarters
Europe: Fast Moving Consumer Goods market dynamics Europe - Austria, Belgium , Czech Rep., Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, UK.

But growth is not universal
Fast Moving Consumer Goods market dynamics: Q vs Q3 2016

U.S. Current state Economic indicators improving, but headwinds remain
Total store sales soft; growth in perimeter continues Small manufacturers winning; retail format no guarantee of success Bifurcation of wants: health & wellness versus indulgence So what is the current state of U.S. FMCG retail trends? Economic indicators improving, but headwinds remain: Consumer confidence rising as unemployment falls along with low food inflation and now tax breaks for many, but headwinds from aging population, low population growth, low working rate, health care costs, low wage growth, and other spending challenges remain. Out-of-home dining continues to grow. Total store sales soft; growth in perimeter continues: Across Nielsen-measured retail channels, departments & categories, total store gains have been less than spectacular. Over the past four (52-week) periods, dollar sales grew, on average, by 1.6%, but grew by just 0.3% in Low or no unit sales growth has been more problematic. Deli prepared meals & snacks and fresh produce leading department growth. Small manufacturers winning; retail format no guarantee of success: In food, growth is coming from smaller more niche manufacturers, premium & value offerings. Retail channels that offer value or convenience continue to lead store expansion, but retail format is no guarantee of success. E-commerce becoming more mainstream, but having a greater impact in non-edible categories. Bifurcation of wants: health & wellness versus indulgence: health and wellness trends continue to grow and evolve, but indulgence also winning consumer spend and retail investment.

Total store gains less than spectacular
All Departments $ sales off 0.3% as unit sales fell 1.2% & despite moderate price increase of 1.6% Dollar Trend +2.0 +2.8 +1.1 +0.3 Unit Trend -0.0 +0.5 +0.1 -1.2 Avg U Price Trend +2.3 +1.0 +1.6 % U sold on Promo 31.6 30.8 31.1 30.5 Across Nielsen-measured retail channels and categories, total store gains have been less than spectacular. Over the past four 52-week periods, dollar sales grew, on average, by 1.6%, but slipped to 0.3% growth in the latest 52-weeks as unit sales fell 1.2% and despite prices increasing marginally (+1.6%) in the latest 52-weeks. Promotion support has been fairly constant with 30.5% of units sold one some form of trade promotion. 52 weeks ending 1/4/2014 52 weeks ending 1/3/2015 52 weeks ending 1/2/2016 52 weeks ending 12/31/2016 52 weeks ending 12/30/2017 Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands, “trend” means % change 52 weeks vs. year ago UPC-coded items

Retail format no guarantee of success
Same-Store-Sales Growth: average latest 52-weeks There are retailers who are growing, but retail format is no guarantee of success. Within their respective retail channels, Home Depot, Walgreens, Costco, Sprouts, Dollar General, and Walmart are driving the strongest growth over the latest 52-weeks, but performance by competitors in their respective channels is not always at the same level. U.S. shoppers are spending on home improvement projects as evidenced by the strong same-store-sales success of both Home Depot and Lowe’s. The drug chains are showing mixed performance with only Walgreens exhibiting growth. Costco continues to outperform Sam’s Club in the club channel. Sprouts leading growth over Publix and Kroger, while Albertsons and Whole Foods growth has slipped and all have shown a sharp drop in recent quarters as deflationary pressures continue to impact performance. The two major Dollar are posting gains, but well below their performance in 2009 when economic conditions were really tough. Finally, Walmart is delivery growth while Target same-store-sales are basically flat. Both are having success in driving e-commerce growth. Kmart struggles continue. *Sales in stores open for at least one year within a retail chain. Last update: 3/2/2018 Note: Save-A-Lot removed as they are no longer a public company. Source: Company press releases; monthly or quarterly news releases – excluding gas

What matters most is good tasting & convenient food @ a Good price
% Comp-Same-Store Sales Growth: latest 52-weeks Take note of the publicly traded restaurant chains at the top of the list delivering strong same-store-sales growth. At a time when healthy eating is on the minds of many, most of the top performing chains are not very engaged in the health & wellness space. What seems to matter to their visitors is good tasting and convenient food at a good price. Domino’s tops the list in overall performance and they have been a leader in leveraging the latest digital technology to allow consumers to order from a variety of sources (including Google Home, Echo, Tweets, etc.). At least 50% or more of sales for Domino’s, Pizza Hut and Papa John’s sales from digital orders. Read More: Most chains have posted slower growth in the last couple of quarters. After overcoming significant declines due to food poisoning issues, Chipotle returns to the list, but growth was just 1% and .9% in the latest two quarters. Figures represent average of latest 52-weeks or actual annual figures based on latest fiscal year reporting. Updated on 3/2/2018 Note: Panera no longer publicly traded and removed from list. At least 50% or more of sales from the top 3 pizza chains are from digital orders Source: Company Press Releases – U.S. Results; dominos.com; fools.com

Fast-food restaurant makeovers
“Arby's, KFC and Taco Bell appeal to millennials” AdWeek “Good design is no longer reserved for high-end experiences” Susan Cantor, CEO of Red Peak Branding Why So Many Legacy Fast-Food Restaurants Are Getting Makeovers; Arby's, KFC and Taco Bell appeal to millennials September 19, 2016—When it comes to dining, no matter the cost of the meal, millennials place a premium on overall experience and that includes comfortable, well-appointed spaces, say marketing analysts. Having seen the steady rise of fast-casual competitors like Shake Shack and Panera Bread, legacy fast-food chains like KFC, Arby's and Taco Bell now are busy sprucing up their decor. “KFC's first redesigned restaurant, which opened in October 2014 and was designed by FRCH Design Worldwide, featured red and white pinstripes, an ode to KFC's bucket from the 1970s, on both the exterior and interior, with a large rendering of Colonel Sanders prominently featured on the front of the building. The chain has redesigned 100 restaurants so far, and it plans to redesign 70 percent of its U.S. restaurants in the next three years.” “Arby's, which remodeled 179 of its U.S. restaurants in 2015 and expects to remodel an additional 225 this year, has seen a 15 percent sales lift from its redesign. The new look, which features wooden floors and paneling and the brand's signature red seats, helps unify design across the 50-year-old chain's restaurants, said Greg Vojnovic, chief development officer at Arby's..” “Taco Bell is in the process of updating its look as well. In May 2016, the chain began testing four new design concepts with gray brick walls, chalk renderings of tacos, and pink, purple and orange murals of taco sauce packets that will later be installed in Taco Bells across the country. "Some of our restaurants are dated, so it behooves us to update and modernize," said Marisa Thalberg, CMO of Taco Bell. "It's about bringing the brand's DNA and its best self forward. It's an opportunity to make our dining rooms great places to hang out and stay, and make it just as compelling as going through the drive thru.“ FULL STORY: Fast Food Makeovers | NACS Online – Media – News Archive Taco Bell, Arby’s and KFC have been busy revamping their décor to compete with fast casual concepts. September 23, 2016 – NEW YORK CITY – Today’s diner, including the coveted millennial, places a premium not just on the food but also on the overall eating out experience. That has fast-food chains like Arby’s, KFC and Taco Bell sprucing up their joints, Advertising Week reports. FULL STORY: Source: AdWeek Photos: KFC/Richard Cadan, Arby’s/Dena Dendy, Taco Bell

Chains catering to more upscale diners delivering mixed growth
% Comp-Same-Store Sales Growth: latest 52-weeks Publically traded restaurant chains catering to more upscale diners delivering mixed growth. Figures represent average of latest 52-weeks or actual annual figures based on latest fiscal year reporting. Updated on 2/16/2018 Source: Company Press Releases – U.S. Results; The Capital Grille (photo)

convenience & value drive Long-Term store expansion
Expansion from all formats but Drug & Mass Merchandisers in 2017 vs. 2016 88% of long-term growth & 389% of short-term growth from niche formats* Convenience and value are winning in the marketplace as evidenced by increased store count. Since December 2005, most store expansion has come from channels outside of traditional Food, Drug & Mass-Merchandise formats. Convenience Stores, Dollar Stores, Supercenters, and Warehouse Clubs continue store count expansion. Since December 2016, tore count expansion in all channels but Drug and Mass Merchandisers. Supermarkets have grown by 2,588 stores since However, there has been a fair amount of store closings along with tear downs and re-builds in the channel and 88%* of the store growth has come from low- and high-end niche retailers such as Aldi, Save-A-Lot, Lidl, Trader Joe’s, Whole Foods, Sprouts, Fresh Thyme Farmers Market, The Fresh Market, and Natural Grocers. 50% of the niche store growth from low-end (Aldi, Lidl, and Save-A-Lot); 50% from the high-end natural, organic and specialty retailers mentioned above. In the short-term (versus 2016), supermarkets only saw store count grow by 64 stores, but niche grew by 249 stores with 65% from low-end and 35% from high-end. *These calculations do not include deep-discount grocery banners from HEB, Kroger, PriceRite or Spartan or any smaller natural/gourmet banners. Note: Except for the Convenience channel, these represent TDLinx definitions of retail channels and may differ slightly from those by Nielsen retail measurement and Homescan. For the Convenience channel we used the NACS definition. Slide updated on 1/19/2018 MER *Niche formats include Aldi, Save-A-Lot, Lidl, Trader Joe’s, Whole Foods, Sprouts, The Fresh Market, and Natural Grocers Source: Nielsen TDLinx, U.S. counts are for open stores during month of December

Ahold Delhaize & Kroger pull back on fresh-focused concept stores…
…while “Publix is betting the next big thing will be the continued growth of organic foods” Publix plans to open its first newly redesigned GreenWise Market concept store in Tallahassee, Florida in late 2018 and a second store in Mount Pleasant, South Carolina in early “Unlike typical Publix stores, which measure 45,000 square feet … GreenWise stores will be about half that size, and feature scores of unique items for consumers.” Ahold Delhaize & Kroger pull back on fresh-focused concept stores… While Publix continues to test the waters with their fresh format. The original GreenWise store opened in 2007 to compete with Whole Foods. Kroger: 12/4/2017: Kroger to close Main & Vine store after only 23 months: Learnings from venture being applied to affiliate banners. Read more: 2/4/2016: Kroger Opens New Concept Main & Vine in Gig Harbor, Washington: Kroger has made the first step into a new concept focused on fresh produce and high-quality prepared foods with the official opening of its first Main & Vine location in Gig Harbor, WA. Read more: Ahold Delhaize: 11/20/2017: Supermarket chain said to be dropping small Bfresh stores planned for Philly: Dutch supermarket giant Ahold Delhaize, whose chains include Giant, Food Lion, and Stop & Shop, is suspending its Bfresh brand of smaller-format, urban-focused grocery stores, which it had planned to open in Philadelphia as part of a larger national rollout. Read more: 5/16/2017: Bfresh markets are taking over Boston-area neighborhoods: Bfresh opened this year in Davis Square with a sizable offering of reasonably priced foods prepared in house. Its name declares its intent. The Somerville market is the third for the grocer (other locations are in Allston and Brighton), owned by Royal Ahold NV, the Dutch parent company of Stop & Shop. Read more: Publix GreenWise 11/27/2017: Publix Announces Second GreenWise Market Location: Publix Super Markets has selected Mount Pleasant, South Carolina, as the second location for its new GreenWise Market concept, focusing on the specialty, natural and organic sector. Mount Pleasant lies immediately to the east of Charleston, and the selected site is located within the Indigo Square shopping center at the northwest corner of US Highway 17 and Indigo Market Drive. The store will be approximately 25,000 square feet and is expected to open early "We’re excited to bring GreenWise Market to the Mount Pleasant community,” said Kevin Murphy, Publix Senior Vice President of Retail Operations. “We’re creating an environment where fresh, specialty, natural and organic food is celebrated. We’ll have something for everyone, from the indulgent foodie ready to discover something new to the health-conscious shopper seeking fresh, high-quality ingredients.” The location of the first newly redesigned GreenWise Market was announced earlier this year. The store is currently under construction near Florida State University at the southwest corner of Gaines Street and Railroad Avenue in Tallahassee, Florida. It is expected to open late Additional details about the new GreenWise Market format will be released closer to the opening of the first location. The company continues to look for additional GreenWise Market locations throughout its operating areas. News Release: 9/1/2017: Doubling down: …To that end, Publix is betting the next big thing will be the continued growth of organic foods. Next year, the company intends to open its first Greenwise market in Tallahassee, the first of some 100 such organic-centric stores the chain is planning to open in coming years. Unlike typical Publix stores, which measure 45,000 square feet, Crenshaw says the Greenwise stores will be about half that size, and feature scores of unique items for consumers. Read more: 3/31/2017: Publix Sets Sights on GreenWise Stores: Today, Publix Super Markets, Inc. announced the company's plan to reignite the GreenWise store concept. The first newly redesigned GreenWise will be located near Florida State University at the southwest corner of Gaines Street and Railroad Avenue in Tallahassee, Florida, and is expected to debut in late "We are committed to being the retailer of choice for consumers who are looking for specialty, natural and organic products," said Kevin Murphy, Publix Senior Vice President of Retail Operations. "Over the past several years, we have gained valuable insights from our existing GreenWise locations. By combining these learnings with customer feedback and market trends, we are better positioned to deliver on our vision of being the best at serving the evolving lifestyles of today's consumer.“ Publix plans to share additional details related to the new GreenWise format closer to the store opening. The company continues to aggressively look for additional GreenWise locations throughout its operating areas. News Release: Sources: Company websites and Business Observer of Florida

In-store pub & ice cream parlor with space to relax, Eat & shop
Here's a sneak peek of the new Weis Markets store opening in Cumberland County Updated on March 4, 2017 at 9:54 AMPosted on March 3, 2017 at 4:37 PM Weis Markets offers a preview of a new 65,000 square-foot prototype store featuring the company's first in-store pub, with a rotating selection of draft beers and a growler station, and full service ice cream parlor, at 4525 Valley Rd., in Hampden Township, Cumberland County. The store is opening March 9. Read More: Source: pennlive.com

Trading places on local sourcing?
“Whole Foods will further centralize its buying operations and bar brand representatives from marketing their products in stores, according to The Wall Street Journal. The retailer informed manufacturers of its new policies during last week’s Expo East conference. Centralized buying, meanwhile, is aimed at improving efficiency, but some analysts and suppliers say the retailer will shed many of the niche and local products that have made the grocer unique.” fooddive.com (9/22/2017) “At Kroger, we make it a priority to source locally – after all, it’s important to support our neighbors, and sourcing locally gives us some of the freshest produce, meat and seafood possible! Plus, we recognize that every community has tastes and products that are unique to their region. We make sure we stock local items that are meaningful to our Customers…it’s an easy way to make a connection, and also help the local economy!” As the Amazon acquisition of Whole Foods is having them move to centralized buying, Kroger steps up efforts to source locally. Whole Foods to further centralize buying operations and bar brand reps from store, September 22, 2017: Kroger Loves Local, September 26, 2017: Sources: fooddive.com; kroger.com/topic/we-are-local

Target’s “most ambitious redesign in two decades”
“The $10 million makeover of the Nicollet Mall Target is complete, giving a glimpse of the Minneapolis retailer's plan to retool its stores” Fresh produce and grab-and-go meals, with more attractive displays, have been moved to the front of the store. A “Made in MN” popup shop on the second floor of the downtown Target store Locally produced spirits & beer are given prominent shelf space in the new liquor store Target's Nicollet Mall store makeover gives glimpse into plan to retool stores The $10 million makeover of the Nicollet Mall Target is complete, giving a glimpse of the Minneapolis retailer's plan to retool its stores August 21, 2017—A new, red bull’s-eye prominently marks the spot on Nicollet Mall where Target’s efforts to retool its stores for the digital age are on full display. Inside the buzzing store next to the retailer’s headquarters, the company has redesigned and upgraded everything from the fitting rooms to the online pickup counter and the grocery department. Read more: Our Downtown Minneapolis Store Just Got a Major Makeover—Get a First Look Inside August 21, 2017—Ever since we announced plans to reimagine hundreds of stores over the next three years, our teams have been hard at work bringing to life new enhancements to make the shopping experience easier and more inspiring for our guests. In fact, we’ve completed 45 remodels so far this year, with 65 more stores to be renovated throughout the fall. By the end of 2019, more than one-third of our stores will be reimagined—part of our $7+ billion investment to become an even better, more modern Target. Read more: Nicollet Mall Target store remodel Read more: How Target is reimagining its stores to compete in the digital world Target currently gets less than 5 percent of its retail business from digital, however, CEO Brian Cornell is looking to change that. March 21, 2017—Target CEO Brian Cornell began his talk on the stage of ShopTalk in Las Vegas this week telling the audience, "The future of retail is digital," a gutsy statement from the head of a public company who currently gets less than 5 percent of its $75 billion in revenue from digital. Cornell described his vision of how Target intends to make its network of 1,800 stores a strategic asset to win in the digital world, and how they are planning to invest billions of dollars to do it. Cornell's vision is the Target store as a "Hyperlocal, shoppable distribution center." With a store within 4 miles of 50 percent of the U.S. population and they envision a competitive advantage in "last mile" delivery including same-day delivery, as well as a convenient "pick up" center for items ordered online. Interestingly, although Target's current digital revenue is only $3.5 billion (nothing to sneeze at but a tiny fraction of their total scale), Cornell says over 50 percent of digital purchases are picked up in the store (and as much as 80 percent during holiday peaks). The design of Target's new stores offers two different entrances, paralleling the envisioned dual personality in Target's digital future. One entrance is the more traditional, browsable retail experience. The other entrance is more of a lounge and is specifically designed for customers who are picking up orders placed online. The first store based on this model will be opening later this year in Houston, Texas with as many as 500 more stores being similarly remodeled over the next 3 years. Read more: Sources: Target & Minneapolis Star-Tribune 15

Aldi investing $1. 6B to refresh stores by 2020 & $3. 4B to up U. S
Aldi investing $1.6B to refresh stores by 2020 & $3.4B to up U.S. store count to 2,500 by 2022 Aldi is “planning to open 900 new stores in the United States in the next five years. The announcement comes days before another German chain that also has smaller-format stores, Lidl, opens its first American stores. Aldi, which first came to stateside with a store in Iowa in 1976, currently has 1,600 stores in 35 states. In addition to its planned $3.4 billion capital investment which comes with 25,000 new jobs, the supermarket company also said it plans to spend $1.6 billion to remodel 1,300 of its existing stores by 2020, according to the company.”1 The grocery chain says the upgraded stores will deliver “on its customers’ desire for a modern and convenient shopping experience with a focus on fresh items, including more robust produce, dairy and bakery sections.”2 On the eve of Lidl’s U.S. launch of their deep discount supermarket format, Aldi released plans to up their store count to 2,500 stores by 2022. Aldi assortment is heavily skewed to private brands and food and includes about 1,400 items versus 30,000 plus in a traditional U.S. supermarket. NEWS Aldi to invest $3.4B in further expansion; Goal of 2,500 U.S. stores by 2022; could leapfrog Albertsons, Ahold in total units, 6/12/2017: Grocery chain Aldi to open another 900 stores in U.S., 6/12/2017: Aldi Rolling Out $1.6B Store Remodel Program, 2/8/2017: Aldi plans to remodel more than 1,300 U.S. stores by 2020, costing the retailer an estimated $1.6 billion, the company said Wednesday. The grocery chain says the upgraded stores will deliver “on its customers’ desire for a modern and convenient shopping experience with a focus on fresh items, including more robust produce, dairy and bakery sections.” Aldi, based in Germany, operates more than 1,600 stores in the U.S., across 35 states. In the last few years, Aldi says it has added a number of new product lines that have quickly become customer favorites, including the liveGfree brand of gluten-free foods, SimplyNature products featuring many organic items and a full line of premium baby items under the Little Journey brand. Remodeled stores also will feature a modern design, open ceilings, natural lighting and environmentally friendly building materials—such as recycled materials, energy-saving refrigeration and LED lighting. Read more: Sources: 1USA TODAY (6/12/2017); 2The Shelby Report (2/8/2017)

Lidl entered U.S. market in June 2017
Forty-seven stores are now open in six Southern United States with plans to open as many 100 stores by mid-2018, but… …five stores under construction have been put on hold suggesting new management is rethinking Lidl’s growth strategy in the U.S. Copyright © 2018 The Nielsen Company. Confidential and proprietary. LIDL - Lidl store locator: 12/13/2017: Lidl Hits Roadblocks, Slows Expansion In The U.S.: Slow sales and unrelenting competition have slowed Lidl’s entry into the United States. There are now 47 stores open in six states in the Southern part of the U.S. By the middle of 2018, the company may open as many as 100 stores but that’s a more conservative estimate than I previously published… now seems that expansion has slowed. There are about five stores that were under construction that have been put on hold since a new board member – Michael Aranda – was put in charge of the U.S. expansion. One of these stores is in New Jersey (it would have been the second to open); others are in Virginia, Pennsylvania and Ohio. That is puzzling since the company has a real estate portfolio of more than 400 store locations. Yet, it suggests that the new management is rethinking how to pursue its growth strategy. Some stores may be too big. Read more: 9/14/2017: Lidl Is A Force To Reckon With As It Expands Rapidly In The U.S.: Lidl opened its first U.S. stores on June 15. By the end of this month, 37 will have opened in five states on the Eastern seaboard. There are stores in North Carolina (13), South Carolina (8), Virginia (14), Delaware (1) and Georgia (1). It is likely that 30 more stores might open by the end of the year in just these markets. In addition, the company has indicated that it will open units in New Jersey, Texas, Ohio (Dayton and Cincinnati) and Western Pennsylvania. I would not be surprised that by mid-year 2018 Lidl operate stores on the East Coast. That number would be above the plans that management has shared, but it reflects my belief that their success will drive faster expansion. 8/30/2017: Lidl Preps for Ohio Entry: Applications already filed for 3 locations: 7/27/2017: Grocery chain Lidl opens four Richmond-area stores: 6/26/2017: Lidl to build DC, regional office in Georgia: 4 more store openings announced: 6/26/2017: Lidl reveals more U.S. store openings; to build fourth DC: 6/15/2017: Lidl opens first U.S. stores as new era in food retail begins: “We will beat the best prices in the market,” CEO says: 5/17/2017: MARK YOUR CALENDAR: LIDL TO OPEN FIRST U.S. STORES ON THURSDAY, June 15, 2017; Lidl Announces 20 Store Locations In VA, NC and SC; Invites Customers to Rethink Grocery Shopping ARLINGTON, VA – After much anticipation, Lidl, one of the world’s largest retailers, announced today it will open its first stores in the United States on Thursday, June 15. Lidl also unveiled the location of 20 stores that will open during the Summer of By next Summer, Lidl plans to open up to 100 stores across the East Coast, creating a total of 5,000 U.S. jobs. Lidl news release: 2/15/2017: A first look at how German grocer Lidl plans to conquer the U.S. market: Source: Forbes Image: David Keith Photography 17

Future Retail Landscape
In past releases of this report, we included a five-year forecast of compounded annual dollar growth rates and share trends across a wide variety of retail channels. Because of modifications to how updates to forecast inputs were obtained, as well as wide fluctuations in gas and food prices over recent years, the historical data file became unreliable to produce reasonable forecasts for all channels. As a result, a decision was made to eliminate the forecast from this report. In it’s place, we are comparing channel store closings versus e-commerce sales growth to provide a view of retail channels most likely to be negatively impacted by disruptions from further e-commerce growth. Should you have a need for retail channel- or product-specific forecasts, please contact your Nielsen representative who can connect you with Nielsen forecast specialists.

which retailers are losing to e-commerce now & who will be next?
Vulnerability Scale Up $316B since 2007 STORES CLOSING Over the past decade plus and according to U.S. Census metrics, e-commerce sales have grown at an amazing pace (adding $316 billion in sales between 2007 and 2017). Examining net store closings over that time illustrates how specialty retail channels (i.e., consumer electronics, apparel, books, office supply, toy stores, and home/bed/bath stores) have been most vulnerable to the disruptive force of e-commerce expansion and will likely continue to feel pain. The decline in traditional mass-merchandiser store counts is more a function of conversions of Walmart mass formats to supercenters, although Kmart store closings come into play here too. While e-commerce is having very broad impact, there are retail channels which have been less vulnerable to e-commerce expansion (i.e., dollar, c-stores, liquor, discount department, supermarkets, auto and pet stores), while others (supercenters, sporting goods, home improvement, and club) are likely feeling greater vulnerability from e-commerce expansion today. HHGregg to close all stores after failing to find a buyer, April 7, 2017: The bankrupt retailer is planning to begin liquidating its assets Saturday after failing to find a buyer by its Friday deadline. The company expects to close all of its 220 stores by the end of May, resulting in about 5,000 layoffs across the U.S. Amazon reportedly plans private label lingerie expansion, February 10, 2017: Amazon, which has been quite assertive in its apparel push, has become the largest online seller of apparel: Its $16.3 billion apparel sales in 2015 exceeded those of the next five competitors — Macy’s, Nordstrom, Gap, Kohl’s and Victoria’s Secret parent L Brands — combined. Factoring in Amazon’s seven-brand private-label rollout earlier this year, it’s no wonder Cowen & Co. analysts expect the e-commerce company will dethrone Macy’s as the largest U.S. clothing retailer some time this year. Read more: Canadian footwear retailer Shoes.com shutters operations, January 30, 2017: Amazon's footwear and apparel efforts extend far beyond Zappos. As the largest online seller of apparel, its $16.3 billion apparel sales in 2015 exceeded those of the next five competitors — Macy’s, Nordstrom, Gap, Kohl’s and Victoria’s Secret parent L Brands — combined, according to an Internet Retailer report. Consumers purchased more than one million pairs of shoes on Amazon Prime Day in July, and when factoring in Amazon’s seven-brand private-label rollout earlier this year, it’s no wonder Cowen & Co. analysts expect the e-commerce company will dethrone Macy’s as the largest U.S. clothing retailer in Read more: Current news release: Data Source: Time Series available in Excel Format: Adjusted Sales [42KB: E-Commerce data in this chart was released was May 16, 2017 Release Schedule: Root directory: Note: Online travel services, financial brokers and dealers, and ticket sales agencies are not classified as retail and are not included in either the total retail or retail e-commerce sales estimates. Sources: Nielsen TDLinx (open store counts); U.S. Census Bureau, U.S. Retail E-Commerce Sales

“A TSUNAMI OF STORE CLOSINGS” for U.S. Retailing
CLOSED On January 12, 2018, Business Insider reported that “More than 12,000 stores are expected to close in 2018 – up from roughly 9,000 in 2017, according to Cushman & Wakefield.” READ MORE: Forecasted Source: businessinsider.com; Cushman & Wakefield

What’s Selling? We will now examine trends in department and category sales levels and trends.

Small companies & private label posting biggest gains
FMCG Manufacturer Growth by Tier: (Dollar Share) & Dollar Growth It has been a tough time for the largest U.S. fast-moving-consumer-goods manufacturers. Growth has been coming from the smaller, more nimble or innovative companies. I heard Ken Harris (Cadent Consulting Group) talk at an NFRA event in April of this year and he brought up the idea that companies need to think small to innovate. A path in which some large U.S. companies (like Campbell’s and General Mills) have taken as they have been investing in smaller companies to help them enhance their innovation efforts. UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (All Outlets Combined (including Convenience), 52 weeks ending 12/30/2017 (vs. year-ago)

(Share of 2017 gains indexed to share of sales in 2013)
deli, Produce & meat over delivered, but almost half the growth from grocery Edible Departments (excluding Alcoholic Beverages) Performance Index (Share of 2017 gains indexed to share of sales in 2013) 10 33 101 146 445 339 91 Deli, Produce & Meat departments over delivered in terms of growth between 2013 and 2017, but almost half the dollar share gains within the edible departments came from the grocery department. The deli and produce departments delivered dollar share growth at rates of over three times “expected” levels based on their share positions in Growth in the grocery was about 9% below expected growth based on 2013 share position. Growth performance was particularly low for the frozen (67% below expected) and dairy (90% below expected) departments. Note: The performance index, took the share of absolute dollar share gains from 2013 to 2017 and indexed those gains to department share levels in 2013. Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52-weeks ending 12/30/2017 versus 4-years ago UPC-coded items

Hy-Vee store w/ full-service restaurant & prepared foods galore
On a trip to Minneapolis this summer, I checked out one of Hy-Vee’s new stores. Wow – full-service restaurant with bar and prepared foods galore – including Asian, Italian, barbecue, Mexican, and a Sushi bar. Source: photos by Todd Hale, LLC

Walking the sweet goods gauntlet
You don’t need to go to the center of the store! At my local Kroger store, you don’t need to go to the center of the store to buy cookies or donuts. On the path to the produce department, through prepared meals and snacks, special cheeses, and special crackers, you must walk a gauntlet of displays full of sweet goods (from cookies to pies to donuts and muffins). Source: photos by Todd Hale, LLC

Demand shifts & price volatility behind winning & losing edible categories
EDIBLES: Absolute Dollar Loss/Gain versus four years ago Top 10 with increases vs. 4-years ago: Salty Snacks New Age Beverage Beer & Malt Based Beverages Fruit Water Vegetables & Herbs Wine Candy Liquor Fresh Meat Top 10 with decreases vs. 4-years ago: Milk Ready-to-Eat Cereal Soft Drinks Frozen Poultry Sugar Margarine & Spread Baking Mixes Shelf Stable Vegetable Refrigerated Juice Drinks Shelf Stable Juices & Drinks Demand shifts and price volatility behind winning & losing edible categories. The Grocery department has delivered over the long-term. The Grocery department alone has delivered $12.0 billion in growth compared to $12.5 billion from all other edibles. Four of the top growth categories & five of the biggest declining categories are from the grocery department. Sales increase for these top growth grocery department categories are much larger than the loss from decliners ($11.3 billion in gains versus $2.8 billion in losses). NOTES: The top/bottom 10 lists are based on all categories from the Edibles Departments (UPC-items only) – (Alcohol, Bakery, Dairy, Deli, Frozen, Grocery, Meat, and Produce Departments) The underlined items in the top/bottom 10 lists are Grocery Department categories. The gray text box covers the Grocery Department only. UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017 (vs. 4-years ago), 190 major edibles category groupings

(Share of 2017 gains indexed to share of sales in 2013)
Alcoholic beverages & health care over-delivered at nearly twice “expected” levels Non-Edibles Departments (including Alcoholic Beverages) Performance Index (Share of 2017 gains indexed to share of sales in 2013) 28 64 68 55 86 195 166 In terms of non-edibles (including alcoholic beverages and tobacco products), the alcoholic beverages and health care departments over delivered in terms of growth between 2013 and These two departments accounted for over half (53.0%) of the dollar share gains within the non-edible departments. The alcoholic beverage and health care departments delivered dollar share growth at a rate of nearly twice the “expected” level based on the department’s share positions in Increased health care costs seems to have led to more spending for over-the-counter medications. All other non-edible departments performed below expected levels. Because the general merchandise department lost sales over this time period, the department was excluded from this assessment. Note: The performance index, took the share of absolute dollar share gains from 2013 to 2017 and indexed those gains to department share levels in 2013. Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52-weeks ending 12/30/2017 versus 4-years ago UPC-coded items

Price volatility & demand behind short-term trends
All Outlets Combined (plus Convenience) – Dollar Trend Over the most recent 52-weeks, price volatility (positive and negative) and consumer demand are the driving forces behind department trends. Deflationary pricing has been most problematic for the general merchandise, beauty care & dairy departments driving declines in dollar growth. Solid consumer demand for the deli, produce & health care departments. Most center-store departments have struggled for growth and this speaks to the stronger consumer perception around fresher offerings in the perimeter departments, the areas of the store receiving a great deal of retailer focus. Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017 (vs. year ago) UPC-coded items

Vinegar & Cooking wine delivering solid dollar & unit growth
U.S. Vinegar & Cooking Wine Aided by rising prices (driven by 16% increase in unit prices for cider vinegar), but low promotion support Dollar Trend +7.3 +8.0 +11.0 +12.3 Unit Trend +4.9 +3.2 +5.6 Avg U Price Trend +2.2 +4.6 +5.1 +7.0 % U sold on Promo 16 15 17 Across Nielsen-measured retail channels and categories, vinegar & cooking wine have delivered solid dollar & unit growth. Dollar growth has accelerated in each of the past three years aided by rising prices, but low promotion support – both heavily influenced by price and promotion trends for cider vinegar (with unit prices up 4.6%, 5.1% and 7.0% in the latest three years, while promotion support was just 15%, 15%, and 17% of units sold on promotion in the past two years). TH checked UPC-coded items Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), All Brands, “trend” means % change 52 weeks vs. year ago

Cider vinegar driver of growth & now leader in sales
U.S. Dollar Sales (Millions): Vinegar & Cooking Wine 4-YR $ CAGR Latest Year 28.4% 40.2% 4.6% 2.7% 1.0% (3.6%) (0.7%) (3.8%) 52 Weeks Ending Cider vinegar the biggest driver of growth (4-year compounded annual dollar growth rate of 28.4% and latest year growth of 40.2%) and overtakes white vinegar as the leader in sales (at $266 million). TH checked UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience); CAGR = compound annual dollar growth rate

Vinegar & Cooking wine on list of Fastest growing edible categories
Fastest Growing Edible Categories (Dollar Trend) Here are the fastest selling edible categories (with sales in excess of $50 million) across all Nielsen-measured retail channels – vinegar & cooking wine number nine on the top ten list. TH checked UPC-coded items Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017 (vs. year ago), categories w/ sales of $50 million+

cider Vinegar on list of Fastest growing edible sub-categories
Fastest Growing Edible Sub-Categories (Dollar Trend) Here are the fastest selling edible sub-categories (with sales in excess of $50 million) across all Nielsen-measured retail channels – cider vinegar number four on the top ten list. TH checked UPC-coded items Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017 (vs. year ago), categories w/ sales of $50 million+

Vinegar ingredient Categories with nearly $18 billion in sales
U.S. Vinegar Ingredient Categories Both dollar & unit growth declined in latest year Dollar Trend +0.5 +1.5 +0.9 -0.3 Unit Trend -0.1 -0.6 -1.4 Across Nielsen-measured retail channels and categories, categories containing vinegar as an ingredient have posted modest dollar growth over three of the past four years, with modest decline of 0.3% in the latest year. Unit sales have shown flat to slightly negative sales, with a 1.4% decline in the latest 52-weeks. However, categories where vinegar is an ingredient are delivering nearly $18 billion in total measured sales. TH checked UPC-coded items Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), All Brands, “trend” means % change 52 weeks vs. year ago

Seven categories with sales near or above $1 billion in annual sales
U.S. Vinegar Ingredient Categories – Top Tier Dollar Sales Ranking TH checked UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017

a mix of established & newer (refrigerated) categories
U.S. Vinegar Ingredient Categories – Bottom Tier Dollar Sales Ranking TH checked UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017

Growth from large & small categories
U.S. Vinegar Ingredient Categories – Top Growth Categories Top Tier $ Sales Bottom Tier $ Sales TH checked UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 12/30/2017; % change year ago

Strongest growth in Canada, U.S., & Brazil
Vinegar & Cooking Wine Sales: Value Sales Growth (2016 versus 2015) France: 1.3% Germany: 10.8% Great Britain: 0.6%* Italy: 3.9% Spain: 0.7* 8.7% 12.3% Hong Kong: 0.7% Show ranking of countries already using online order for delivery to home – do with map 28.8% *Excludes Cooking Wine From a sample of countries where Nielsen captures retail measurement on the category, we see the strongest value or currency sales growth in Canada, the Unites States, Germany, and Brazil. Outlets covered: Canada: NAT XNFLD ALL CHANNELS: All Outlets Combined (National (excluding New Foundland) Grocery Banner (GB) +Drug (DR) +Mass Merch (MM) +General Merch (GM) +Warehouse Club (WC)) United States: All Outlets Combined, plus Convenience Stores – includes grocery stores, drug stores, mass merchandisers, convenience stores, select dollar stores, select warehouse clubs, and military commissaries (DeCA) Brazil: All Outlets Combined T.SELF SERVICE STORES (supermarket, Hipermarket and neighborhood) France: HYPERMARKETS + SUPERMARKETS Germany: Food incl. Aldi, Lidl, Norma + Drugdiscounters + Cash&Carry Great Britain: Total Coverage (Grocery Multiples + Impulse) Italy: Hyper+Super+Self Services+Discount+Traditional Grocery Spain: Total Spain Self-Services greater than 100 sq meters Thailand: Large Trading Format which included big chains (Big C, Tesco Lotus, and Makro) - no total country picture TH checked Source: Nielsen Retail Measurement

Private brands* *AKA: PRIVATE LABEL, STORE BRANDS, OWN BRANDS
We will now examine private brands – which some refer to as private label, store brands or own brands. They all refer to products produced exclusively for or manufactured by a retailer for sale within a retailer. Most products carry the retailer’s name, but not all.

U.S. Private Brand share IN the middle of the pack
Weighted Global Average: 16.7% (with China); 18.7% (without China) Reference Period: 2016 In 2016, U.S. private brand dollar share (17.5) was in the middle of the pack relative to private label share across the globe. Private label shares are highest in European countries, while lowest in developing Asian and Latin American countries. Slide received from Sujoy Ghosh on 9/22/2017. Note: United States xAOC (excludes convenience stores) Data Source: Nielsen Retail Service 39

European Retail Brands VALUE share trend
12 years & 18 countries* Here is a long-term trend on private brand development in Europe. As we will see, share trends are similar to what has occurred in the U.S. as private brand share experienced strong growth as consumer demand for low prices intensified when the Great Recession hit at the end of 2007 and continued into Since then, private brand share growth slowed and dropped slightly in 2015 , but posted a nice gain in 2016*. *About one-third of the share growth due to update in data (either in store universe or market definition) and roughly two-thirds due to "real" growth. Slide received from Sujoy Ghosh on 9/22/2017. * Austria, Belgium, Czech Rep, Denmark, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, UK Source: Nielsen; value share

Diversity in share levels & growth
24% 26% Finland 41% 27% Norway 25% Sweden 27% 21% Denmark Great Britain Nether- lands 36% Poland 21% 31% Belgium Germany Czech Republic Slovakia 23% Austria 30% 42% Switzer- land Hungary France 25% 32% 43% Italy 26% Value Share >30% Portugal Spain Value Share between 25-30% 19% Value share < 25% Nielsen measures diversity in European country specific share levels and growth with the greatest private brand shares in Switzerland (43%), Spain (42%), and United Kingdom (41%) and the lowest shares in Italy (19%), Poland (21%), and Czech Republic. Private brand shares grew in nine countries and fell in nine. Slide received from Sujoy Ghosh on 9/22/2017. Increasing compare to 2015 Data Source: Nielsen Retail Service Decreasing compare to 2015

Private Brands growth outpaced manufacturer brands in 2017
Private Brands $ Share – All Departments Dollar Sales Percent Change vs. Year Ago Private Brand +4.9% +8.1% +3.0% +2.5% +2.8% -0.3% Branded +1.2% +3.3% +2.7% +1.6% +1.5% +2.6% -0.5% Over the past 8 years private brands dollar share grew 1.8 share points from 16.2 to Share growth was best in 2010 and 2011 as private brands dollar sales growth in both of those years was considerably greater than growth observed by brands. However, since 2012, private brands dollar growth was comparable to what brands experienced. Private brands posted no share growth in 2015 and private brands share slipped in 2016, but have posted higher growth again in 2017. Private Brands dollar sales in Total U.S. All Outlets Combined (xAOC): $95 billion 52 Weeks Ending 12/26/2009 $101 billion 52 Weeks Ending 1/1/2011 $109 billion 52 Weeks Ending 12/31/2011 $113 billion 52 Weeks Ending 1/5/2013 $116 billion 52 Weeks Ending 1/4/2014 $119 billion 52 Weeks Ending 1/3/2015 $122 billion 52 Weeks Ending 1/2/2016 $122 billion 52 Weeks Ending 12/31/2016 $125 billion 52 Weeks Ending 12/30/2017 (Latest 52 weeks) Branded dollar sales in Total U.S. All Outlets Combined (xAOC): $492 billion 52 Weeks Ending 12/26/2009 $501 billion 52 Weeks Ending 1/1/2011 $519 billion 52 Weeks Ending 12/31/2011 $534 billion 52 Weeks Ending 1/5/2013 $544 billion 52 Weeks Ending 1/4/2014 $553 billion 52 Weeks Ending 1/3/2015 $567 billion 52 Weeks Ending 1/2/2016 $574 billion 52 Weeks Ending 12/31/2016 $571 billion 52 Weeks Ending 12/30/2017 (Latest 52 Weeks) Sources: Nielsen Strategic Planner (2009 data) & Nielsen Answers ( data), Total U.S. – All Outlets Combined (xAOC), Total All Departments, UPC-coded items

Private brands gain share in all but cider vinegar, where brands lead
U.S. Vinegar & Cooking Wine Private brands gain share in all vinegar and cooking wine segments but cider vinegar, where brands now lead. TH checked Private Brand share growth UPC-coded items Source: Nielsen Answers, Total U.S. – All Outlets combined

Amazon’s private brands winning
“After decades of selling products—and knowing exactly what people are buying, and when they are buying it—Amazon has started cutting out the middle-man by selling self-produced items.” “Amazon’s private label brands are taking over market share” Amazon owns a whole collection of secret brands August 07, 2017 After decades of selling products—and knowing exactly what people are buying, and when they are buying it—Amazon has started cutting out the middle-man by selling self-produced items. … Now, Amazon is selling products across a wide array of categories, using a host of brands that do not exist outside the confines of amazon.com and do not make it clear that they are Amazon-made products. … When reached for comment about its branding strategy, Amazon did not have an explicit answer, but a spokesperson confirmed the following brands are indeed Amazon’s: “Amazon has a range of brands including Amazon Basics, Happy Belly, Mama Bear, Pinzon, Presto!, Wickedly Prime, Goodthreads, Amazon Essentials, Mae, Ella Moon, Buttoned Down, The Fix and Lark & Ro.” Sources: Amazon & qz.com

Walmart’s jet.com has a New Digital Brand Called “Uniquely J” (And It’s Pretty Cool)
“Wal-Mart, which acquired Jet.com for $3 billion [in 2016] as part of its effort to take on e-commerce giant Amazon, is betting on Uniquely J for its reach of “urban, more affluent millennials,” and compete with Amazon in the private label sector.” Free Shipping Over $35 & Free Returns Jet.com “Uniquely J” Brand Includes: Coffee Sauces & Oils Snacks Cleaning Paper Food Storage Shop bundles & save 10% Jet.com is often compared to Amazon — here’s how the startup is different, February 11, 2018, 11:32 AM: Jet.com president: Edgy private label packaging and products target urban millennials, November 7, 2017: Jet.com Exec on Wal-Mart's New Strategy to Take on Amazon, November 3, 2017—Private-label fans no longer need to compromise! Walt-Mart’s Jet.com launched private-label brand Uniquely J, which boasts better packaging, higher quality, and attractive price points. Jet.com president Liza Landsman joined Cheddar to discuss the strategy. The perks don’t stop there, Landsman says. The e-commerce company looked at a year’s worth of data, detailing the items most coveted by its core consumers. Among the winners? Fair-trade coffee, PBA-free plastic storage bags, and certified organic products. “Our insights from those consumers tell us [environmental consciousness is] really an important factor for them, beyond price and quality,” she said on Friday. The Boston Consulting Group says half of U.S. millennials between the ages of 18 and 24, and 38 percent of those between 25 and 34, agree that brands "say something" about their identity, values, and where they belong. This is often a popular deciding factor for millennials when considering purchases. Similarly, private labels have gained great appeal with millennials over the past few years. According to market research firm Mintel, more than one-third of U.S. shoppers preferred to buy store-brand products over name brand one. Wal-Mart, which acquired Jet.com for $3 billion last year as part of its effort to take on e-commerce giant Amazon, is betting on Uniquely J for its reach of “urban, more affluent millennials,” and compete with Amazon in the private label sector. However, analysts predict that Amazon’s acquisition of Whole Foods will boost the company’s private labels sales. Read more and watch video: Can Jet.com Woo Millennials With Private-Label Brands? Jet.com is targeting millennials customers with edgy and fun new private-label brands. Will it work? October 7, 2017: Uniquely J – Wal-Mart is firing back with a move aimed directly at millennial shoppers, which now account for the largest segment of the buying public. Jet.com has confirmed to The Motley Fool that over the next few months, it will launch a private-label brand, called Uniquely J, "a brand designed for metro millennial consumers." This will allow the e-commerce site to compete with Amazon on price for a wide range of everyday items that shoppers buy the most. "The thoughtfully curated selection of products will include essentials like coffee, olive oil, laundry detergent, paper towels, and more," according to an ed statement. Jet.com spokesperson Meredith Klein, Director of Public Relations, went on to say that the brand would incorporate "boldly designed packaging" and "fun, witty label copy" combined with quality ingredients "designed with this metro consumer in mind": Uniquely J brings together everything our customers care about -- from quality to design and beyond -- without trade-offs. Instead of focusing in on any one aspect of product development, we've created a uniquely valuable brand experience that will speak to the metro millennial lifestyle. Motley Fool story: Jet.com’s New Digital Brand Is Called Uniquely J (And It’s Pretty Cool), Posted: Friday, September 29, 5:00 PM: Alright, you got us. The rumors are true. Jet.com in all its purple glory is launching a digital brand of all of your favorite everyday (and special day) products. Maybe you’re here because you read Fortune. Or The Wall Street Journal. Or Time. Business Insider maybe? Either way, we’re glad you’re here. The buzz is real and we can’t wait to share Uniquely J with you. We wouldn’t necessarily call it “Jet.com groceries” because it’s so much more than that. Jet.com’s digital brand is so us. And so you. What is Uniquely J? We can’t tell you everything. Yet. What we CAN say is it will take the guesswork out of all those “what should I buy” questions. And it’s NOT just groceries. For once, you’ll be able to get the coffee that tastes like it came from the good coffee shop (you know what we mean), cleaning products that clean well and look good on a shelf, plus more — all without that heartstopping pricetag. The packaging looks pretty great too. Want to be the first to know the details? Visit Jet.com/UniquelyJ and sign up to be the first to know the moment we launch! Get ready to fill your cart with Uniquely J. Source: Fortune story: The Wall Street Journal story (subscription): Time story: Business Insider story: UNIQUELY J: Serial Number: , Trademark Details: Sources: Jet.com; Cheddar.com; Fortune.com

Connecting With Shoppers That Matter
Connecting with Shoppers That Matter: from demographic groups driving growth opportunities today and in the future to retailers leveraging Big Data to segment their most valuable shoppers.

Plenty of upside to build shopper base & attract more buying trips
U.S. Vinegar & Cooking Wine: Annual Buying Behaviors Plenty of upside to build shopper base & attract more buying trips. TH checked UPC-coded items Source: Nielsen Homescan, Total U.S. – All Outlets Combined, 52 weeks ending 12/30/2017

Good news: Vinegar & cooking wine attract sales across young & old
$ Sales Per 1,000 Households Index Category Millennials Gen X Boomers Greatest Generation Grocery Department 100 109 99 85 Vinegar & Cooking Wine 93 101 104 *Read as: Grocery department sales among households with a Millennial head of household, are 15% lower than sales among total U.S. households. Good news: Vinegar & cooking wine attract sales across young & old. Greatest Generation: Prior to 1946; Boomers: , Gen X: , Millennials: Facts (index is calculated): Sales Per 1,000 Household = Dollar Volume (000) / Buying Households (000) * 1000 Sales Per 1,000 Household Index = Sales Per 1,000 Household for segment / Sales Per 1,000 Household for total group * 100 TH checked UPC-coded items Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/30/2017; >=110 is above average and <=90 is below average

Vinegar & cooking wine attracts a more diverse shopper to the store
$ Sales Per 1,000 Households Index Category White Black Asian Hispanic (any race) Grocery Department 102 90 81 Vinegar & Cooking Wine 98 106 101 *Read as: Vinegar & Cooking Wine sales among Asian households are 6% greater than sales among total U.S. households. Vinegar & cooking wine attracts a more diverse shopper to the store. Facts (index is calculated): Sales Per 1,000 Household = Dollar Volume (000) / Buying Households (000) * 1000 Sales Per 1,000 Household Index = Sales Per 1,000 Household for segment / Sales Per 1,000 Household for total group * 100 TH checked UPC-coded items Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/30/2017; >=110 is above average and <=90 is below average

Vinegar & cooking wine more developed among higher income
$ Sales Per 1,000 Households Index Category < $20k $20 - $29.9k $30 - $39.9k $40 - $49.9k $50 - $69.9k $70 - $99.9k $100k+ Grocery Department 85 91 94 100 102 105 111 Vinegar & Cooking Wine 86 89 104 116 *Read as: Vinegar & Cooking Wine sales among households with incomes $100k+ are 16% greater than sales among total U.S. households. Vinegar & cooking wine more developed among households with higher income. Facts (index is calculated): Sales Per 1,000 Household = Dollar Volume (000) / Buying Households (000) * 1000 Sales Per 1,000 Household Index = Sales Per 1,000 Household for segment / Sales Per 1,000 Household for total group * 100 TH checked UPC-coded items Source: Nielsen Homescan, Total U.S. 52 weeks ending 7/1/2017; >=110 is above average and <=90 is below average

Digital Shopping & DIGITAL RETAILING
Digital Shopping and digital retailing are here to stay and pace of change is incredible and some, but not all consumers are making the switch at the same pace. Retailers investing in e-commerce models and while they are likely spending more of their current marketing dollars on print-based advertising, future expectations favor digital.

E-commerce growth trajectory accelerates in Q4 2017
Total U.S. Retail Sales: $1,233.9B for Q4 2016 $1,304.3B for Q4 2017 Total U.S. Retail E-Commerce Sales $101.8B for Q4 2016 $119.0B for Q4 2017 E-Commerce $ %Change vs. Year Ago 14.4% for Q4 2016 16.9% for Q4 2017 E-Commerce Share of Total Retail Sales 8.2% for Q4 2016 9.1% for Q4 2017 Talk about convenient consumer solutions on steroids, just look at the growth curve in U.S. retail e-commerce sales. While the e-commerce share of total retail sales was just around 9.1%, $119 billion in the 4th quarter of 2017 is a huge number and the growth trajectory is very promising. SALES 4th QUARTER 2017 February 16, 2018—The Census Bureau of the Department of Commerce announced today that the estimate of U.S. retail e-commerce sales for the fourth quarter of 2017, adjusted for seasonal variation, but not for price changes, was $119.0 billion, an increase of 3.2 percent (±1.1%) from the third quarter of Total retail sales for the fourth quarter of 2017 were estimated at $1,304.3 billion, an increase of 2.7 percent (±0.4%) from the third quarter of The fourth quarter 2017 e-commerce estimate increased 16.9 percent (±1.1%) from the fourth quarter of 2016 while total retail sales increased 5.7 percent (±0.4%) in the same period. E-commerce sales in the fourth quarter of 2017 accounted for 9.1 percent of total sales. Current news release: Data Source: Time Series available in Excel Format: Adjusted Sales [42KB: Release Schedule: 4th Quarter 2018 will be released on February 16, 2018, at 10:00 am (Eastern) 1st Quarter 2018 will be released on May 17, 2018, at 10:00 am (Eastern) 2nd Quarter 2018 will be released on August 17, 2018, at 10:00 am (Eastern) 3rd Quarter of 2018 will be released on November 19, 2018, at 10:00 am (Eastern) Root directory: Note: Online travel services, financial brokers and dealers, and ticket sales agencies are not classified as retail and are not included in either the total retail or retail e-commerce sales estimates. Source: U.S. Census Bureau, Quarterly U.S. Retail E-Commerce Sales

Amazon finishes 2017 in impressive fashion
Amazon Performance Metrics Amazon finishes 2017 in impressive fashion with fourth quarter net sales growing 38% and net income reaching $1.9 billion. Source: Company Reports

Amazon online grocery sales equivalent to next nine retailers
2016 online dollar sales of supermarket-type products (millions) $6,680 Supermarket News reported their estimates of the top 10 digital retailers selling supermarket-type products online. In 2016, the SN article had Amazon selling $6.2 billion – almost equivalent to the combined sales of the next nine top selling retailers. Note that SN pointed out how they included sales from services like Instacart and Shipt were included in their retailer estimates. Here is a slide-by-slide review of this year’s Supermarket News’ 2017 Digital Top 10 (using 2016 Sales), released on July 6, 2017: (subscription required) Source: supermarketnews.com – July 6, 2017

E-COMMERCE DRIVING MEANINGFUL SALES ACROSS FMCG non-edibles
U.S. E-COMMERCE SHARE OF SALES Edible manufacturers should be working with their retail partners to maximize the importance of their products in bringing shoppers to stores! Nielsen’s new e-commerce measurement service reports how e-commerce is driving meaningful sales across fast-moving-consumables in non-edible departments – with latest 52-week dollar shares of between 31% of beauty care sales to 9% of household care sales. E-commerce shares within edible departments are much less significant, ranging from a high of 3% for packaged grocery sales to 1% for dairy, bakery, alcoholic beverages, and frozen foods departments. Edible manufacturers should be working with their retail partners to maximize the importance of their products in bringing shoppers to stores! Slide added to this deck on 1/11/2018 Lauren F. Source: Nielsen e-commerce measurement, 52 weeks ended Oct. 28, Projected from ~1MM e-commerce FMCG consumers and cooperating ePOS retailers based on reported commodity groups that may not match prior custom or syndicated category definitions. Share of Total FMCG via Nielsen Retail Measurement Services (xAOC+C).

Wide variety of “cooking & baking” vinegars on amazon
Shop Amazon by “Category” Source: Amazon.com

Shop Amazon by “Hot new releases” Source: Amazon.com

Shop Amazon by “Most wished for” Source: Amazon.com

Shop Amazon by “Top rated” Source: Amazon.com

Shop Amazon by “Most gifted” Source: Amazon.com

Shop Amazon by “Best sellers” Source: Amazon.com

Door-to-Car, door-to-door, door-to-Inside Your Home or fridge
Amazon opened grocery pickup sites in Seattle for Prime members; exploring ways to deliver items to your car trunk; launched delivery inside your home with Amazon Key Walmart plans to double the number of its U.S. stores that offer online grocery pickup to 2,000 stores by the end of 2018; testing grocery delivery straight to your fridge while you are not home Conversely, Kroger slows ClickList & home delivery expansion with focus on existing customers & their shopping experience AmazonFresh Pickup website: Amazon Key website: News: 10/25/2017: Introducing Amazon Key, a New Level of Delivery Convenience for Prime Members; Available initially in 37 cities across the United States, Amazon’s innovative new service enables in-home delivery at no extra cost; Amazon Key also allows customers to grant secure home access for guests and, coming soon, tens of thousands of service providers, such as Merry Maids, Rover and professional services from Amazon Home Services; Amazon Key includes the Amazon Key app, a smart lock and the company’s newest device, Amazon Cloud Cam, an intelligent indoor security camera. Read more: 10/11/2017: Amazon exploring ways to deliver items to your car trunk and inside your home: 10/11/2017: Kroger Won't Bother With Home Delivery For Now. Instead of aggressively developing its home delivery services or expanding its click-and-collect program, ClickList, Kroger will instead direct its focus on existing customers and their shopping experiences. Read more in The Street: 10/10/2017: How Walmart plans to win online grocery: 9/24/20/17: Walmart is teaming with a smart lock startup to deliver food straight to your fridge: 5/25/2017: Amazon opens Seattle grocery pickup sites to Prime members:

Grocery delivery services catching on
How will it impact roll-out of AmazonFresh? Instacart “Instacart has quickly scaled to over 190 markets and partnered with retailers across North America, including popular national chains as well as local, regional grocers.” Shipt Claims to be the nation's fastest growing online grocery marketplace serving “tens of millions of households” across the U.S. Target Corp. acquired Shipt on December 13, 2017: “Target will begin offering same-day delivery of groceries, household essentials, home goods and electronics through Shipt in the coming months. It plans to have the service up and running from half of its 1,800 stores by this summer and from most of its stores by next winter.” On January 25, 2018, Target announced plans to roll out its first Shipt-powered deliveries to 57 stores in Birmingham, AL and South Florida beginning Feb. 1, ahead of a promise to launch the program this springtime. Grocery delivery services are catching on with retailers and just maybe they will get ahead of Amazon Fresh expansion as they may be able to leverage their network of local shoppers and local retailers to buy local fresh foods! SHIPT + TARGET 1/26/2018: Target deploying Shipt deliveries to 57 stores: 1/11/2018: Shipt Grocery Delivery Expands With H-E-B Across Texas: 1/5/2018: Target will wind down Instacart partnership as focuses on Shipt acquisition: 12/13/2017: Here’s How Acquiring Shipt Will Bring Same-Day Delivery to About Half of Target Stores in Early 2018: As part of ongoing efforts to make shopping at Target even more convenient, Target just announced it will acquire Shipt, a rapidly growing same-day delivery company, for $550 million. The move—one of the largest acquisitions in Target’s history—means same-day delivery will be an option at about half of Target stores beginning in early And by the 2018 holiday season, it will be an option at the majority of Target stores, and in all major markets. Read more: 8/31/2017: Shipt is currently in fifteen states: AL, AR, FL, GA, IL, IN, KY, MI, NC, OH, OK, SC, TN, TX, WI 8/30/2017: Shipt to Expand Delivery Options in Atlanta and Nashville: Shipt, the nation's fastest growing online grocery marketplace, works with leading retailers and local stores to deliver groceries via a community of shoppers and a convenient app. Since its founding in 2014, Shipt has been rapidly expanding and now offers quality, personalized grocery delivery to over 25 million households in 69 markets across the country. Shipt offers unlimited grocery deliveries to members for $99 per year. The company currently has offices in Birmingham, AL, and San Francisco, CA. For more information, visit Shipt.com. INSTACART 1/16/2018: Instacart has today announced the acquisition of Unata, a Toronto-based company that offers a platform for both grocers and consumers to interact digitally. The terms of the deal were not disclosed: 1/11/2018: Target to end partnership with Instacart: 1/11/2018: SUPERVALU And Instacart To Launch New E-Commerce Sites As Part Of Multiyear Agreement: (THIS IS THE SOURCE OF THE BOILER PLATE, ABOUT INSTACART) 1/9/2018: Sprouts Expands Home Delivery Through Partnership with Instacart: 8/31/2017: Instacart is a grocery delivery service that delivers in as little as an hour! We connect you with Personal Shoppers in your area who pick up and deliver your groceries from your favorite local stores. Instacart is not a retailer or a seller of groceries or other merchandise. 8/30/2017: Instacart lands another mega grocery deal: Instacart is now in more than 100 markets, after adding more than 80 in That’s significantly more than the 30 new markets Instacart CEO Apoorva Mehta told Axios the company had planned in an interview in March of this year. Instacart has raised about $675 million in venture financing from the Kleiner Perkins Caufied & Byers, Andreessen Horowitz, Comcast Ventures and others, according to Crunchbase. 5/8/2017: Instacart is Launching 100+ Cities in America’s Heartland! Today, Instacart operates in 50 markets in the US. Our customers live everywhere from Seattle to Chicago to Miami. But we’re nowhere near done expanding. We’re excited to announce that this year we will be bringing Instacart to over 100 more markets across the US! … With our plans to serve 80% of American households by 2018, we have started our expansion into the next 100 cities in America. Source: Instacart Press Page: Sources: Shipt, Instacart, Target, Minneapolis Star Tribune

Some QSR’s prioritizing food delivery; how will it impact grocery stores?
McDonald’s unveiled its new global growth plan at the beginning of March, which emphasized elevating the customer experience through digital capabilities and the use of technology. Part of that plan includes launching mobile order and pay at 20,000 restaurants by the end of McDonald’s has also been testing delivery as part of its new strategy. According to a company press release, it believes its “extraordinary footprint makes it uniquely positioned to become the global leader in delivery”. Panera announces commitment to hire 10,000 new employees by the end of 2017 to close “the gap in delivery alternatives and creating a way for people to have more options for real food delivered to their homes and workplaces … The initiative will affect 35 to 40 percent of total locations … Seventy-five percent of the jobs for Panera Delivery will go to drivers … The other 25 percent of hires will work in-store” McDonald’s NEWS RELEASE, 3/1/2017: McDonald’s Q1 Earnings: A New Growth Plan, 4/24/2017: McDonald’s unveiled its new global growth plan at the beginning of March, which emphasized elevating the customer experience through digital capabilities and the use of technology. Part of that plan includes launching mobile order and pay at 20,000 restaurants by the end of 2017. McDonald’s has also been testing delivery as part of its new strategy. According to a company press release, it believes its “extraordinary footprint makes it uniquely positioned to become the global leader in delivery”. Read more: Panera Bread’s NEWS RELEASE, 4/24/2017: Panera to Commit 10,000 New Employees to Delivery, 4/24/2017: Panera Bread is officially grabbing the wheel of its delivery program. The fast casual announced it plans to hire 10,000 new employees by the end of 2017 to expand delivery services at more of its 2,000-plus units. The initiative will affect 35 to 40 percent of total locations. Panera introduced delivery in early 2015, and currently offers the service at around 15 percent of its system (20 percent at company-owned stores). “Panera is doing for delivery what we did for quick service—creating an elevated guest experience end-to-end,” says Ron Shaich, Panera founder, chairman and CEO, in a statement. “In many places across the country, all that’s available for delivery is pizza or Chinese food. We’re closing the gap in delivery alternatives and creating a way for people to have more options for real food delivered to their homes and workplaces.” Seventy-five percent of the jobs for Panera Delivery will go to drivers, Panera president Blaine Hurst told Reuters. Hurts also said the program adds around $5,000 to weekly sales at each restaurant—a boost of around 10 percent. The other 25 percent of hires will work in-store, as the program, unlike some of the third-party delivery setups of quick-service chains, will be run by Panera. Read more: Panera to hire 10,000 for delivery service, 4/24/2017: Sources: Forbes, McDonald’s, Panera Bread

Why go out when you can order in?
Grubhub Statistics: Features more than 80,000 online and mobile ordering restaurants in over 1,600 U.S. cities and London Q Highlights: Revenues: $205.1 million, a 49% year-over-year (YOY) increase Net Income: $53.5 million, a 293% YOY increase Active Diners were 14.5 million, a 77% YOY increase Gross Food Sales were $3.8 billion, a 26% YOY increase Grubhub: a third party delivery service continue restaurants with consumers who sometimes prefer to order in! And, it is posting impressive growth! Sources on slide: 2/8/2018: Grubhub Reports Record Fourth Quarter Results: About Grubhub: NEWS Grubhub’s News Room: 2/13/2018: Grubhub Expands Partnership with Foursquare to Bring Restaurant Delivery to More Users Nationwide: 2/12/2018: Yum! Brands, the large-cap restaurant operator, also announced an operating as well as financial partnership with GrubHub, purchasing $200 million of GrubHub's stock. 12/6/2017: Grubhub Uncovers Delivery Trends and Predicts the Next Top Foods in Annual 'Year In Delivery' Report: 11/17/2017: Grubhub Announces Collaboration with IHG® (InterContinental Hotels Group): 10/10/2017: Grubhub Completes Acquisition of Eat24: Source: grubhub.com

“McDonald's, KFC, and Taco Bell have gone to war in the $100 billion delivery market”
Business Insider reported on February 8, 2018: “KFC and Taco Bell announced plans to roll out delivery at thousands of restaurants through a partnership with Grubhub. McDonald's rolled out delivery with UberEATS at 5,000 locations in the US in 2017, and says that the service is driving sales. McDonald's still has the upper hand — but with the Grubhub deal, KFC and Taco Bell have a major opportunity to enter the fast-food deliver war.” McDonald's is modernizing — and has a huge advantage on speed Taco Bell has been trying everything, while KFC plays catch up The Grubhub deal proves KFC and Taco Bell finally getting serious about delivery McDonald's, KFC, and Taco Bell have gone to war in the $100 billion delivery market — and there's a clear winner Feb. 8, 2018, 12:20 PM— Fast-food delivery battles are heating up. On Thursday, Yum Brands— the parent company of KFC, Taco Bell, and Pizza Hut — announced it had entered into a partnership with delivery company Grubhub. With the deal, KFC and Taco Bell will roll out delivery at thousands of locations across the US in 2018. McDonald's made a major delivery push in 2017, going from a handful of locations testing delivery to roughly 5,000 locations delivering orders via UberEATS. Here's how the two fast-food giants delivery strategies measure up. McDonald's is modernizing — and has a huge advantage on speed Taco Bell has been trying everything, while KFC plays catch up The Grubhub deal proves KFC and Taco Bell finally getting serious about delivery Read more: Source: Business Insider

“Are FMCG giants trying to cut out the middleman?”
“Unilever is on a mission to ramp up its direct-to-consumer platforms. Like many FMCG companies, this has become a priority for the business.” Are FMCG giants trying to cut out the middleman? Unilever is on a mission to ramp up its direct-to-consumer platforms. Like many FMCG companies, this has become a priority for the business. February 17, 2017—The strategy was detailed in a job ad posted by Unilever this month, asking for candidates with "entrepreneurial" spirit. The move follows Unilever’s acquisition last year of razor subscription service Dollar Shave Club. That business had enjoyed rapid growth following its 2011 launch and forced Procter & Gamble, the male-grooming market leader, to introduce its own subscription service, Gillette Shave Club, in 2015. P&G followed this last year with a platform in the US for its laundry brand Tide. The company’s marketing director in northern Europe, Stefan Feitoza, said P&G placed "a premium on innovation in all fields, including looking at new trends in shopping". He added: "We’re always looking to be available where and when consumers want to shop across our brands." The enthusiasm of big FMCG companies for new business models has three main causes, a former senior marketer at Unilever said: the shift of shoppers away from the major supermarkets to discounters, high-end retailers and online; the growth of brands perceived as authentic or having provenance; and "the old media model working less effectively – but the alternative model, switching investment into digital channels, is still unproven". Read more: Under Armour’s direct to consumer revenue increases 23% February 1, 2017—Sportswear designer and market Under Armour Inc., reports that direct-to-consumer revenues, which includes its e-commerce sales and revenues of its 241 factory outlets and branded retail stores, grew 23% year over year to $518 million in Q4 from $421.6 million. Direct-to-consumer sales accounted for nearly 40% of overall sales in Q4, CEO Kevin Plank told investors in an earnings call on Tuesday, according to a transcript from Seeking Alpha. The company’s largest revenue stream is still its wholesale business. For the year, direct-to-consumer sales increased 27% to $1.5 billion, which is 31% of total revenue, compared with 30% in 2015 Read more: Dollar Shave Club: Gillette Shave Club: Tide Subscription: Under Armour: Sources: CampaignLive.co.uk, Gillette, Procter & Gamble

Shoppable Recipes at Kroger
Shoppable Recipes at Kroger “The website houses 50,000-plus shoppable recipes connected to local retailers, allowing users to select a recipe and then add all items included in the recipe to a cart with just a click. The smart shopping list can be used in-store with an aisle-by-aisle guided list or sent directly to Kroger’s online cart for curbside pickup or delivery.” January 18, 2018: Kroger Recruits for Management, Supplies for Shoppable Recipes: …For the shoppable recipes, Cary, N.C.-based omnichannel shopping solutions provider Myxx has expanded to include Kroger banners on its platform, which increases consumer options while bolstering the retailer's partnered CPG brand coverage. Myxx’s proprietary algorithm translates online food recipes into dynamic shopping lists while promoting retailers and key CPG brands, enabling online and in-store shopping via one customized site: myxxrecipes.com, which is free for users and allows filtering according to food preferences and dietary restrictions. The website houses 50,000-plus shoppable recipes connected to local retailers, allowing users to select a recipe and then add all items included in the recipe to a cart with just a click. The smart shopping list can be used in-store with an aisle-by-aisle guided list or sent directly to Kroger’s online cart for curbside pickup or delivery. While the initiative is not an actual partnership between the two, it does further Kroger's commitment to customer convenience outlined in the Restock Kroger plan. Myxx plans to expand the platform across all of Kroger’s banners this year. However, this isn’t the first time the two have been associated with each other: The platform currently includes more than 240 Harris Teeter stores in the Southeast. The Matthews, N.C.-based grocer, which Kroger owns, partnered with Myxx in 2017 to launch HarrisTeeterRecipes.com… Read more: January 18, 2018: Myxx® Expands Shoppable Recipe Platform to over 1300 Kroger Stores in 17 States; Grocery Shopping Made Easier for Customers, More Profitable for Kroger & CPG Brands Omnichannel shopping solution provider Myxx® announces expansion of its shoppable recipe platform to more than 1300 Kroger stores and ClickList.com throughout 17 states. The addition of Kroger stores to the Myxx platform increases consumer options while bolstering its partnered CPG brand coverage. Myxx’s proprietary and sophisticated algorithm translates online food recipes into dynamic shopping lists while promoting retailers and key CPG brands, enabling online and in-store shopping via one customized site, myxxrecipes.com. Myxxrecipes.com is free for users and allows filtering for food preferences and dietary restrictions. With more than 50,000 shoppable recipes connected to local retailers, a user can select recipes and add all of the items needed to the shopping list with just a click. The smart shopping list can be used in-store with an aisle by aisle guided list or sent directly to the selected retailer’s online cart for curbside pickup or delivery options. “The rapid adoption of meal kits and online grocery shopping underscores the rising consumer demand for convenient meal time solutions” says Monica Wood, CEO of Myxx. “Myxx Recipes goes beyond the meal kit by giving shoppers increased options including: thousands of recipes, ability to compare prices- brands, and to purchase in-store or online. By adding the largest U.S. grocer and 2nd largest U.S. retailer to the platform, we are able to extend our service and help millions of consumers save time and money and help CPG brands reach shoppers from inspiration to purchase. Myxx Recipes is truly a win-win-win for all key stakeholders.” The Myxx platform is now available to Kroger shoppers in 17 states; Alabama, Arkansas, Georgia, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Ohio, South Carolina, Tennessee, Texas, and Virginia. Myxx plans to expand functionality across the entire Kroger family of retailers in The Myxx platform currently includes more than 240 Harris Teeter stores in the southeast. Harris Teeter, a wholly-owned subsidiary of Kroger, partnered with Myxx in 2017 to launch HarrisTeeterRecipes.com. Grocers and leading brands such as Aidells, Barilla, Eggland’s Best and McCormick, are using Myxx to expand their online presence and impact; drive customer sales, engagement, and loyalty to compete with the ever-expanding consumer demand for online, personalized shopping experiences. News Release: September 28, 2017: 10 Cool Companies from the CED Tech Venture Conference: For the second year in a row, ExitEvent interviewed more than 50 startup founders over two days at the CED Tech Venture Conference. Myxx — Last year, Myxx signed a term sheet for a $400K seed round led by Cofounders Capital at the conference. This year, co-founder Monica Wood presented as a “Showcase Company” the same week she announced a strategic partnership with Harris Teeter. The idea behind Myxx came after Wood lost over 100 pounds by “learning to cook, shopping at a grocery store and eating out less.” But after becoming a senior product manager for LivingSocial, her travel schedule prevented her from sticking to those healthy habits. She tried meal kits, but they were too time intensive and costly. So she decided to develop her own solution, making it easy to find simple and delicious recipes, then add the necessary ingredients to a shopping list that she could pull up on her phone at the grocery store or order online for pickup or delivery. What started as a simple recipe and grocery list aggregator has turned into much more. Wood’s platform now helps consumer brands and retailers market to and build loyalty among consumers. The platform automatically pairs specific brands’ products with the ingredients listed in the recipe, thus providing instant customers to brand partners. Grocery retailers can also partner with Myxx to drive local shoppers to their stores or online ordering options. Read more: Source:

Competition heats up! Retailers partner w/ Google for voice-activated shopping on Google Home device Costco Home Depot (Fall 2017) Kohl's PetSmart Target (2018) Ulta Walgreens Walmart Whole Foods And, more!!! Google Express has eliminated its membership fee & shipping is free as long as a customer hits a given retailer’s minimum threshold order, $35 in Walmart’s case.) Stores available nationwide for voice orders (as of 10/26/2017): You can order from the below stores anywhere in the US (except Alaska and Hawaii) with Google Home. You’ll also have additional stores specific to your area (see a full list -- Source: Target takes voice-activated shopping nationwide with Google, joining Wal-Mart in fight against Amazon Published 10:00 AM ET Thu, 12 Oct 2017 Updated 10:38 AM ET Thu, 12 Oct 2017 Target is expanding nationwide on Google Express. In 2018, shoppers will have an option to link their Target.com accounts to Google. Other retailers on the Google Express platform include Wal-Mart, Costco, Kohl's and Ulta, according to Google's website. Read more: Home Depot adds ‘voice-activated’ shopping to the mix October 6, 2017—The nation's largest home improvement retailer is getting in on the voice shopping game. Home Depot is joining Google Express this fall, a move that will give its customers the ability to shop just by speaking their orders. Google Assistant, the search giant's online shopping platform, resides on Google’s smart speaker Google Home and other smart devices. Source: Walmart voice shopping on Google Home is now live; The two companies teamed up in August to take on Amazon and its Echo. October 4, 2017—Voice shopping with Walmart and Google is officially here. Source: Walmart and Google Team Up to Take on Amazon's Voice Assistant App Updated: August 23, :26 AM ET Walmart (WMT, +1.19%) is teaming up with one of Amazon’s (AMZN, -0.42%) biggest rivals to plant its own flag in the growing voice assistant wars: Google. The discount chain announced in a blog post on Wednesday that beginning in late September, it will be making hundreds of thousands of items available for voice shopping on Google’s voice assistant app, Google Assistant, in a bid to compete with Amazon’s Alexa capability on its Echo devices and offer a service many competitors do. Walmart is not quite pioneering on this front: the voice shopping feature, integrated into Google’s smart-home suite earlier this year to fill a big gap in Google Home’s capabilities, already offers customers the chance to voice-shop at retailers like Costco Wholesale (COST, +1.44%) and Target (TGT, +2.18%) , two of Walmart’s biggest brick-and-mortar rivals. But Walmart will offer the widest assortment yet of any retailer selling on Google Assistant. (Google also announced it is eliminating its membership fee ( and shipping is free as long as a customer hits a given retailer’s minimum threshold order, $35 in Walmart’s case.) Read more: Walmart, Google Partner to Make Shopping Even Easier – Here’s How By Marc Lore President and CEO, Walmart U.S. eCommerce August 23, 2017 Running around, going to work, picking kids up from school, making dinner and, between all of that, there’s shopping to do. Because of this, I believe our job at Walmart isn't only about saving our customers money, but also about making shopping faster and easier. Today, we’re announcing an exciting partnership with Google to do just that. Starting in late September, we’ll be working with Google to offer hundreds of thousands of items for voice shopping via Google Assistant – the largest number of items currently offered by a retailer through the platform. Read more: Walmart delivery ordered through Google Home Ordering from Walmart via Google Express Sources: Google & CNBC.com

2018 Predictions Okay, so we have gone through a lot of material, let’s wrap this up and then address any questions.

Seven Predictions for 2018 Stars Aligned For Growth – Are you?
Clean Label, Ethnic, Comfort, & Convenience Innovation Basket Building Personalized Marketing Seven Predictions for 2018 Fresh Ideas For Center-Store Department Trip Magnets Private Brands Resurgence Stars Aligned for Growth, but Are You: Consumer tailwinds (low unemployment, favorable prices, rising wages, high consumer confidence, lower federal taxes for many) will overshadow headwinds (aging population, low population growth, and higher gas prices), but this will not lead to meaningful growth in all fast-moving-consumer-goods retailers and categories. Companies just can’t sit on the sidelines and wait for growth, they need to invest in growth. Clean Label, Ethnic, Comfort & Convenience Product Innovation: Better for you, fresh, less processed, ethnic flavors, comfort foods, and convenience will drive innovation investments. Winning brands will also invest in packaging to accentuate those elements. Brands and retailers will expand less expensive free-from/clean label offerings to compete with more expensive organic and natural products. Basket Building Personalized Marketing: With an increasingly diverse population, retail engagement will continue to move away from mass-marketing techniques to personalized engagements via direct mail and digital tools. It is time to hasten the shift in spending from paper to digital feature ads which enable links from sale items to recipes so that shoppers are provided ideas on how best to take advantage of good prices (including cross-selling opportunities for other recipe ingredients or meal components) yielding larger baskets and enhancing total store sales. Look for similar communications to drive household, beauty, baby and pet care. Fresh Ideas for Center Store: Recent pullbacks from fresh format innovations like Kroger Main & Vine and Ahold Delhaize’s Bfresh stores, highlight the need to focus greater attention on center-store layout and location with respect to retail format innovation. Data-driven efforts to maximize category assortment and location will increase, but will we see experimentation to shake-up the store layout to improve center-store category sales? Winning formats will need to offer a balance of perishable and shelf-stable assortment, along with a combination of shopper experience, in- and out-of-store convenience, and value. Department Trip Magnets: E-commerce will receive disproportionate investments in marketing spend, but some brick & mortar retailers will go it alone or collaborate with manufacturers to leverage anchor departments or categories which bring shoppers into stores and minimize the impact from competitive brick and mortar direct-to-consumer or click and collect efforts, or from pure-play e-commerce retailers. More brands will explore their own direct-to-consumer options, while making the most of Amazon’s growth. Private Brands Resurgence: With the launch of Lidl formats; continued expansion of Aldi stores; Amazon investments in private brands (Amazon private brands as well as in Whole Foods’ 365 private brand); mainstream grocers responding with their own initiatives to deliver greater shopper value and stronger profits, will lead to a significant resurgence in private brands investment. Are brands preparing to defend their shelf-space and/or building demand for their products to minimize the impact of this expansion? Strange Bedfellows: Merger & acquisition activity will bring together diverse assets as both retailers and manufacturers acquire assets to catch up with peers, fill voids in offerings, or enter new businesses (e.g., Target acquisition of Shipt to enhance their direct-to-consumer delivery capabilities; Campbell Soup’s acquisition of Snyder’s-Lance to take advantage of expanding snacking occasions; Albertsons’ acquisition of Plated to jettison themselves into broad-based meal kit offerings; General Mills purchase of Blue Buffalo pet products; Albertson’s merger with Rite-Aid). Retail store expansion will slow, and store closings will increase, as retailers use funds to shore-up their best locations; enhance e-commerce engagements; and/or enable acquisitions or alliances to deliver growth and minimize disruptive forces at play in retail today and tomorrow. Strange Bedfellows

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