1. ANNUAL SHOPPER REVIEW: WALMART Robin Sherk Director, Retail Insights Rachel McGuire Senior Analyst November 2013

2. © Copyright 2013 Kantar Retail Copyright © 2013 Kantar Retail. All Rights Reserved. 501 Boylston Street, Suite 6101, Boston, MA 02116 (617) 912- 2828 howard.zimmerman@kantarretail.com No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail. The printing of any copies for back up is also strictly prohibited. Disclaimers The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion. This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.

3. © Copyright 2013 Kantar Retail Executive Summary: Walmart Shopper Review Spending intentions have improved in 2013, though Walmart has not seen these gains translate into increased shopper traffic or basket. Source: Kantar Retail analysis Perceived price leadership is generally strong, as assortment refinement is an opportunity. Neighborhood Market’s and Walmart.com’s shopper reach is mounting as the Supercenter’s penetration falls, despite its ongoing footprint expansion. A sizable proportion of shoppers still feel pressured, as 31% continue to restrict their budgets, driving deal-seeking and trading-down behaviors. Conversely, value discounters and online-only retailers’ (i.e., Amazon.com) reach continues to expand, heightening competition with Walmart. Shifts to these channels also reflect Walmart shoppers’ eroding interest in a one-stop shop and rising attention to promotions. While Walmart shoppers feel broadly satisfied with its low prices, the retailer faces greater rivalry for leadership in edible grocery versus other consumables categories. Many also feel that the product selection could be better tailored to their tastes, which supports the need for this continued area of focus at the retailer. These new growth drivers speak to the importance of advancing Walmart’s multi- format “ecosystem.” In particular, defining Neighborhood Market’s trip mission as a complement to the Supercenter and encouraging website visit frequency will be key to rounding out shopper engagement across these platforms. $

4. © Copyright 2013 Kantar Retail Table of Contents Shopper Penetration –Penetration by channel, banner –Demographic profile Shopper Motivations –Financial concerns –Spending intentions –Reasons to shop less –Motives to visit Shopping Behaviors –Trips, trip type, and baskets –Where else Walmart store shoppers shop Brand Position –Value demands and perceived price leadership –Perceptions of Walmart’s offer and position versus dollar Growth Platforms –Neighborhood Market –Online & mobile reach 4

5. © Copyright 2013 Kantar Retail Shopper Penetration Walmart’s primary format is the Supercenter, and management continues to highlight its role as their primary growth vehicle. Although nearly 300 net Discount/Supercenters have been added since 2007, its reach with shoppers continues to decline. 5 Source: Kantar Retail analysis Meanwhile, the shopper penetration at Neighborhood Market and Walmart.com continues to rise—underscoring the importance of these vehicles for driving new growth. Walmart’s shopper base skews toward lower-income, rural, and suburban families, though it has furthered its reach with upper-income shoppers and urban dwellers in the past five years.

6. © Copyright 2013 Kantar Retail Weekly Shopper Penetration Rate Wanes With the exception of value discounters and clubs, most channels have seen a noticeable long-term decline in their weekly shopper penetration rates. Source: Kantar Retail ShopperScape ®, October 2007, 2008, 2009, 2010, 2011, 2012, and 2013 6 Weekly shoppers, by channel 2007-2013 PPD Supermarkets-4.8 Convenience stores-9.3 Mass channel-1.8 Drug stores-2.3 Value discounters/dollar stores1.7 Warehouse clubs-0.4 This movement indicates that shoppers are consolidating their range of store choices. In particular, more are opting out of channels without strong value positions, as convenience, supermarkets, and drug stores experienced the steepest declines.

7. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, January 2007- October 2013 7 *Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of October 2013 Data labels show format’s penetration during October of each year Walmart’s Core Formats Also Attracting Fewer Despite continued emphasis on Supercenters, its penetration has declined ~560 basis points since 2007. Meanwhile Walmart.com and Neighborhood Market are developing their reach.

8. © Copyright 2013 Kantar Retail Meanwhile, the Shopper Profile Is Shifting All ShoppersMonthly Walmart/WMSC ShoppersPPT Difference Q3 2013 Q3 2012Q3 2007 Q3 '13 vs. Q3 '12 Q3 '13 vs. Q3 '07 Sample Size12116653165396921 Annual HH Income <$25K25%27%28%30%-0.9-3.1 $25K - $49.9K25%28% 29%-0.1-0.6 $50K - $74.9K18% -0.40.0 $75K - $99.9K11% 10% 0.20.5 $100K+21%17%15%13%1.23.2 Kids in HH Children under 19 at home25%28%30%32%-2.0-4.1 No children under 19 at home75%72%70%68%2.04.1 Generation Generation Y (born 1982 to 2002)13% 8%0.85.5 Generation X (born 1965 to 1981)31% 32%31%-0.6 Baby Boomers (born 1946 to 1964)38% 36%38%1.80.5 Seniors (born before 1946)18% 19%23%-1.5-5.5 Hispanic Yes13%12%11% 0.91.2 Household Size 1 member22%19% 24%0.5-5.0 2 members37%36% 33%0.02.9 3+ members42%45% 43%-0.42.2 Home Ownership Own or are buying64% 67%0.5-2.6 Rent27% 28%25%-0.81.7 Live with relatives (in their home)6% 5%4%0.51.8 Other1%2% 0.0-0.4 Pet Ownership Net - Dog/Cat Owners60%63%62%59%1.03.3 Dog Owners42%46%45%43%1.03.4 Cat Owners33%36%34%35%1.40.5 No pets40%37%38%41%-3.3 Market Size Under 100,00013%18% -0.4-0.3 100,000 - 499,99915%19% -0.1-0.8 500,000 - 1,999,99921%23% 24%-0.2-1.3 2,000,000 or more51%41% 39%0.62.5 Noticeably, Walmart’s base is becoming relatively more affluent and younger. Fewer also have children, though Walmart still over-indexes versus all shoppers. Source: Kantar Retail ShopperScape ®, July-September 2007, 2012, and 2013 8 Note: Bolding highlighting indicates significant difference between time periods noted (95% confidence level)

9. © Copyright 2013 Kantar Retail Table of Contents Shopper Penetration –Penetration by channel, banner –Demographic profile Shopper Motivations –Financial concerns –Spending intentions –Reasons to shop less –Motives to visit Shopping Behaviors –Trips, trip type, and baskets –Where else Walmart store shoppers shop Brand Position –Value demands and perceived price leadership –Perceptions of Walmart’s offer and position versus dollar Growth Platforms –Neighborhood Market –Online & mobile reach 9

10. © Copyright 2013 Kantar Retail Shopper Motivations 10 Source: Kantar Retail analysis Walmart shoppers generally feel more comfortable with their financial situation, with near-term spending plans showing upward momentum in 2013. However, more are shopping less often at Walmart versus increasing their frequency. Reasons include the fact that some shoppers are still cutting back their spend, while others seek nicer shopping experiences. Those feeling increased budget pressures are more likely to trade down or look for deals versus change the retailers they frequent. Walmart has faced challenges driving momentum in 2013, reporting negative comparable store sales in its fiscal Q1, Q2, and Q3. However, the sentiment among its shoppers has generally improved throughout the year.

11. © Copyright 2013 Kantar Retail Q3 2012Q3 2013 Job security Much better/somewhat better off20% No change from last year60%62% Somewhat worse/much worse off19%18% Household Income level Much better/somewhat better off28% No change from last year45%47% Somewhat worse/much worse off27%24% Credit card debt Much better/somewhat better off26% No change from last year55%56% Somewhat worse/much worse off20%18% Monthly mortgage/car payments Much better/somewhat better off23%22% No change from last year64%66% Somewhat worse/much worse off13%12% Worth of investments Much better/somewhat better off22%26% No change from last year55%57% Somewhat worse/much worse off23%16% Value of home Much better/somewhat better off20%28% No change from last year56%58% Somewhat worse/much worse off24%14% 11 Source: Kantar Retail ShopperScape ®, July-September 2012 and July-September 2013 Household Financial Health of Walmart Shoppers Note: Shading indicates significant year-to-year difference (90% CL) Those with assets are feeling better about their longer-term investments. Those with assets are feeling better about their longer-term investments. However, a sizeable minority still feels that its position is deteriorating. However, a sizeable minority still feels that its position is deteriorating. Financial Concerns Generally Abate Walmart shoppers’ sentiment is moderating versus last year, a disposition that is in line with all households.

12. © Copyright 2013 Kantar Retail 12 Source: Kantar Retail ShopperScape ®, January 2009–September 2013 Note: No significant differences between all shoppers and Walmart shoppers (90% confidence level) Overall, Spending Plans Have Improved On par with all shoppers, Walmart shoppers’ willingness to spend increased in 2013 to reach levels not seen in years. Though, 3 in 10 will still cut back.

13. © Copyright 2013 Kantar Retail Top Reasons Leading Those to Spend Less Have Nots*Haves* Rising food prices 51%39% Concerns about economy in general 41%42% Rising gasoline prices 45%33% Trying to simplify my life by buying fewer things 39%35% Household income is lower vs. last year 37%32% Saving more in general 34%33% Concerned political leaders won’t take action to keep economy healthy 25% Concerns about job security 17%20% Spending more on non-retail things (healthcare, education, etc.) 18%16% Concerns about the job market 14%20% Saving for a big purchase 7%12% Concerns about housing value/foreclosure 6%7% Concern about the cost of groceries and fuel are the top reasons why lower income, Have-Not shoppers are cutting back, whereas the more affluent Haves are more concerned about the economy. Source: Kantar Retail ShopperScape ®, September 2013 13 Walmart Shoppers’ Reasons for Spending Less at Retail (among past four-week Walmart/WMSC shoppers who said they planned to spend less at retail in the coming month vs. the same time a year ago) *”Have Nots” are those with an annual household income of less than $60k; “Haves” are those with an annual household income of $60k+. Green highlighting indicates a significant difference between Have Not vs. Have Walmart shoppers (95% confidence level)

14. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, February 2013 14 *”Have Nots” are those with an annual household income of less than $60k Closer Look at Offsets to Budget Pressures This year, increased payroll taxes and, more recently, reduced SNAP benefits added stress to many shoppers’ budgets. Initial feedback suggests that lower- income shoppers opted to curb spending over switching stores.

15. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ® May 2013 15 May 2012 May 2013 Just shopping less in general48%40% Other retailers offer more pleasant shopping experience 22%28% Shopping other retailers more conveniently located21%25% Can find better overall value at other retailers20%22% Doing more shopping at supermarkets24%20% Shopping more at retailers where can get in and out quickly 18% Doing more shopping at Target/SuperTarget18% Doing more shopping at dollar stores14% Doing more shopping at online-only retailers9%13% Dividing shopping between more stores; doing less one-stop shopping 14%12% Doing more shopping at warehouse clubs9% Reasons for Shopping Less Often at Walmart/Walmart Supercenter Green highlighting indicates a statistically significant year-to-year difference (95% confidence level) While Steady, 1 in 5 are Shopping Walmart Less Impacting traffic, more shoppers report reducing trips to the Discount stores/ Supercenters than increasing them. Many are doing so to limit spending, though more this year are citing interest in competitors with nicer experiences.

16. © Copyright 2013 Kantar Retail 16 Source: Kantar Retail ShopperScape ®, Feb/May/Aug 2007 and Feb/May/Aug 2013 Fewer Are Driven by the One-Stop Appeal Viewed long term, fewer Walmart shoppers are motivated by one-stop appeals. Instead, more are becoming driven by deals. Location, EDLP, and value remain the top drivers.

17. © Copyright 2013 Kantar Retail Table of Contents Shopper Penetration –Penetration by channel, banner –Demographic profile Shopper Motivations –Financial concerns –Spending intentions –Reasons to shop less –Motives to visit Shopping Behaviors –Trips, trip type, and baskets –Where else Walmart store shoppers shop Brand Position –Value demands and perceived price leadership –Perceptions of Walmart’s offer and position versus dollar Growth Platforms –Neighborhood Market –Online & mobile reach 17

18. © Copyright 2013 Kantar Retail Shopping Behaviors This year, Walmart’s customer traffic has eroded slightly and average basket has been relatively flat. To shore up its position, the retailer has further asserted its price leadership, encouraged cross-box integration, and promoted stock-up savings events. 18 Source: ECRM, Kantar Retail analysis Given that grocery is the primary trip driver and basket component, the retailer has further opportunity to convert sales in general merchandise categories. As Amazon.com continues to rise as a contender, shoring up overlapping categories (e.g., entertainment, apparel) while asserting Walmart’s differentiated offer (e.g., fresh, adult beverage) will become of increased importance.

19. © Copyright 2013 Kantar Retail 19 Source: Kantar Retail ShopperScape ®, Feb/May/Aug/Nov 2010, 2011, and 2012; Feb/May/Aug 2013 Note: arrows indicate significant year-to-year difference from previous year (90% confidence level) Trips to Walmart Edging Down Recently While still ahead of 2010 levels, self-reported trip frequency to Walmart is slowly decreasing as the channel average holds flat. Shoppers tend to visit Walmart roughly once a week, supporting its role as serving routine needs.

20. © Copyright 2013 Kantar Retail Trips Are Generally to Stock Up or Fill In 20 While stock-ups remain the most common reason to visit, roughly as many go to Walmart for fill-in or immediate use trips combined, indicating that the format continues to serve an array of destination needs. Source: Kantar Retail ShopperScape ®, Feb/May/Aug/Nov 2010, 2011, and 2012; Feb/May/Aug 2013 Stock-up Special occasion Immediate use Fill-in Browsing Buy coupon items Buy sale items

21. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, May 2013 21 Edible grocery items HH essentials HBCGeneral merchandise 88% 79% 84% 70% Conversion Rate Main Reason for Last Trip to Walmart Supercenter Was To Buy … Highlighting the opportunity to support cross- box conversion from grocery to general merchandise Trips Are Driven Largely by Edible Grocery Groceries and consumables drive a majority of trips to the Supercenter. Once in the store, many shoppers also browse general merchandise, though the general merchandise purchase conversation rate lags other areas of the box.

22. © Copyright 2013 Kantar Retail 22 $88 $96 Source: Kantar Retail ShopperScape ®, Feb/May/Aug/Nov 2010, 2011, and 2012; Feb/May/Aug 2013 $101 $99 *Note: Last trip to Walmart/Walmart Supercenter for food, groceries, HBC products, or other household essentials While the Basket Size Is Relatively Flat With a basket ring roughly flat year-over-year, about three-fourths of grocery trip spending was dedicated to food and consumables.

23. © Copyright 2013 Kantar Retail 23 Source: Kantar Retail ShopperScape ®, January-September 2007 and 2013 Jan-Sept 2007 Jan-Sept 2013 PPD 2013 vs. 2007 Amazon.com24%52%27.6 Target/SuperTarget42%40%-1.8 Walgreens38%39%1.2 Dollar Treen/a34%n/a The Home Depot36%33%-3.6 Lowe's32% 0.6 CVS/pharmacy29%32%3.7 Kohl's25%31%5.6 Dollar General29%30%1.6 JCPenney32%28%-4.0 Kroger (all banners)23%24%0.6 Sam's Club24%22%-1.8 eBay.com24%22%-2.0 Family Dollar21%22%0.5 Best Buy27%21%-5.6 Macy's19% 0.5 Bath & Body Worksn/a19%n/a Kmart/Big Kmart23%18%-5.1 Barnes & Noble20%17%-2.9 Bed Bath & Beyond19%17%-1.4 PetSmart16%17%1.4 Staples19%17%-2.2 ALDIn/a16%n/a Sears20%16%-3.7 Michaels17%16%-0.7 Top 25 Retailers Cross-Shopped by Walmart/Walmart Supercenter Shoppers While Amazon.com’s expanded reach is striking, there also were solid upticks in cross- shopping at Kohl’s and CVS. Note: Green highlighting indicates significant difference between column percentages (95% confidence level) The steepest cross-shopping declines were at Best Buy, Kmart, JCPenney, Sears, and The Home Depot. Amazon’s Cross-Shopping Reach Has Doubled More than half of Walmart shoppers now also frequent Amazon.com, making this competitor far and away Walmart shoppers’ top cross-shopping destination.

24. © Copyright 2013 Kantar Retail Table of Contents Shopper Penetration –Penetration by channel, banner –Demographic profile Shopper Motivations –Financial concerns –Spending intentions –Reasons to shop less –Motives to visit Shopping Behaviors –Trips, trip type, and baskets –Where else Walmart store shoppers shop Brand Position –Value demands and perceived price leadership –Perceptions of Walmart’s offer and position versus dollar Growth Platforms –Neighborhood Market –Online & mobile reach 24

25. © Copyright 2013 Kantar Retail 25 Source: ECRM, Kantar Retail analysis Broadly, shoppers feel that Walmart is a strong price leader in the market, with particular strength in consumables. Conversely, Walmart’s shoppers see room for improvement in the assortment refinement and in-store experience. Compared with a competing low-priced channel, dollar stores, Walmart has an opportunity to help shoppers stick to their budgets and feel that they got a good deal. Walmart’s brand cornerstone is to help shoppers save money. Today, shoppers value both spending as little as possible and getting a good deal. Accordingly, Walmart has augmented its everyday low price assertions with price guarantees, lower opening price point items, coupons, and various savings events. Brand Position

26. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, January 2013 26 Note: Arrows indicate significant difference between all shoppers and Walmart shoppers (95% confidence level) One-stop shopping falls noticeably lower on the list for both groups. Two Sides of Value of Top Concern to Shoppers Similar to all shoppers, Walmart’s audience is most focused on spending less and getting a good deal, with spending less a slightly higher priority.

27. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, November 2012 27 Accordingly, expect continued marketing appeals around the low cost of its edible grocery offering. Also stiff competition from certain supermarkets for non-perishable grocery Walmart’s Price Perception Is Strong Walmart is most commonly named the price leader across grocery and consumables categories. However, the retailer lagged supermarkets such as H-E-B and Publix in relation to fresh grocery.

28. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, May 2013 28 Experience Price/Value Assortment Anticipate continued focus on honing the grocery offer to local tastes, demands Consider clear, bold displays to aid its positioning Conversely, Assortment Has Room to Refine While Walmart’s value is strong, the retailer’s biggest gaps for improvement pertain to the in-store experience and assortment selection.

29. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, May 2013 29 Which is Better on the Following Factors: Walmart or Dollar Stores? (among shoppers who shopped both Walmart/Walmart Supercenter and a dollar store during the past four weeks) Opportunity to use signage, rounded price points to help shoppers budget at Walmart? Walmart vs. Dollar: Strength Relies on Brands For those looking for low price points, Walmart’s strength versus dollar stores is its broad offering of brands, in-stocks, and private label equity. Conversely, dollar stores are viewed as helping shoppers budget and get a good deal.

30. © Copyright 2013 Kantar Retail Table of Contents Shopper Penetration –Penetration by channel, banner –Demographic profile Shopper Motivations –Financial concerns –Spending intentions –Reasons to shop less –Motives to visit Shopping Behaviors –Trips, trip type, and baskets –Where else Walmart store shoppers shop Brand Position –Value demands and perceived price leadership –Perceptions of Walmart’s offer and position versus dollar Growth Platforms –Neighborhood Market –Online & mobile reach 30

31. © Copyright 2013 Kantar Retail Growth Platforms 31 Source: Kantar Retail research, store visits, analysis Rolling out Neighborhood Markets and investing considerably in its digital presence, Walmart is building an ecosystem of formats and channels to reach its audience how ever they would like to shop. Neighborhood Market shoppers are as likely to make stock-up trips at the store as fill-in, highlighting opportunity to articulate the banner’s complementary role to the Supercenter as it expands in core Walmart markets. Reflective of the store locations, Neighborhood Market’s base also is slightly more urban. As these shoppers are introduced to Walmart, watch for opportunity to hook them into the retailer’s wider offering online. As the retailer develops its digital reach, a key opportunity is to support website trip frequency and convert its in-store shoppers. Also watch for opportunity to augment the Supercenter experience with mobile tools that offer specific utility.

32. © Copyright 2013 Kantar Retail 32 Source: Kantar Retail ShopperScape ®, January 2011 – September 2013, Kantar Retail analysis Neighborhood Market’s Reach Is Growing With continued store expansion, this format now reaches across roughly half of the states. Accordingly, its shopper penetration has more than doubled since the start of 2011.

33. © Copyright 2013 Kantar Retail 33 *in states where Neighborhood Market was present as of January 2011 Bolding/highlighting indicates a significant difference between Walmart Supercenter and Neighborhood Market shoppers (95% confidence level) Source: Kantar Retail ShopperScape ®, January-September 2013 Walmart Supercenter Neighborhood Market Annual HH Income <$25K29%30% $25K - $49.9K28%27% $50K - $74.9K18% $75K - $99.9K10%9% $100K+16% Kids at Home Children under 19 at home28%29% Generation Generation Y (born 1982 to 2002)14%18% Generation X (born 1965 to 1981)31%36% Baby Boomers (born 1946 to 1964)36%29% Seniors (born before 1946)19%16% Hispanic Yes15%21% Locale Rural18%8% Small Town21%11% Large Town15%16% Suburb/Commuter Town37%46% Urban/City10%18% Demographic Profile of Past Four-Week Walmart Supercenter and Neighborhood Market Shoppers* Note there is no difference in affluence or presence of children, indicating that low price value messaging and family appeals are just as important to Neighborhood Market shoppers. Shoppers Are More Urban, Hispanic & Younger Compared with Supercenters, Neighborhood Market attracts a more diverse and cosmopolitan crowd. Its wider reach with younger cohorts also suggests greater opportunity to interact with these shoppers via new media.

34. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, Aug/Nov 2012, Feb/May/Aug 2013 34 *Analysis for all three retailers limited to states in which Neighborhood Market was present as of October 2013 Given the trip types that each format serves, is Neighborhood Market positioned to replace shoppers’ trips to dollar stores? To the Supercenter? Trips Are Divided Between Stock-Up and Fill-In While less of a stock-up destination than the Supercenter, Neighborhood Market balances to serve both grocery stock-ups and fill-in missions. In contrast, Dollar General’s position is clearly articulated as a fill-in destination.

35. © Copyright 2013 Kantar Retail 35 $101 $89 Avg Trips per Month: 5.2 5.5 Source: Kantar Retail ShopperScape ®, Aug/Nov 2012 and Feb/May/Aug 2013 Opportunity to aid assortment refinement in household essentials and HBC, considering that Neighborhood Market dedicates ample space to these areas *Note: Analysis for all three banners is limited to states in which Neighborhood Market was present as of October 2013 The Basket Is Smaller, More Food Focused Relative to Supercenters, Neighborhood Market’s basket is ~12% smaller, with a decreased emphasis of household items, consumables, and general merchandise. Its lower ring is partly offset by its higher trip frequency.

36. © Copyright 2013 Kantar Retail 36 *in states where Neighborhood Market was present as of January 2011 Source: Kantar Retail ShopperScape ®, January-September 2013, Kantar Retail analysis Competitors that Neighborhood Market particularly overlaps and over-indexes with: % NM Shoppers Cross- Shopped Retailer Index vs. All Shoppers Walmart/WMSC79%105 Walgreens60%144 Amazon.com56%115 Target/SuperTarget52%144 CVS/pharmacy46%147 Dollar Tree43%151 Dollar General43%133 The Home Depot43%138 Lowe's39%121 JCPenney37%148 Family Dollar37%174 Sub-Subnet - Kroger36%113 Kohl's34%141 Sam's Club31%141 Best Buy31%162 Macy's30%179 eBay.com28%145 Bed Bath & Beyond27%182 Bath & Body Works27%164 7-Eleven25%232 Kmart/Big Kmart25%191 Barnes & Noble24%159 Big Lots24%196 PetSmart24%144 Office Depot24%186 Top 25 Retailers Cross-Shopped by Neighborhood Market Shoppers* Cross-Shopping Across a Host of Competitors The range of formats that Neighborhood Market shoppers also frequent indicates that this box serves as more of a complement than an anchor store.

37. © Copyright 2013 Kantar Retail 37 Source: Compete, Kantar Retail analysis Given that Walmart.com’s monthly growth rate has flattened recently, anticipate greater attention to supporting its presence and promotions. Assessing Walmart.com’s Reach While Walmart.com’s audience reach outpaces store-based contenders, such as Target.com, Amazon.com remains an accelerating leader in the channel.

38. © Copyright 2013 Kantar Retail 38 Source: Kantar Retail ShopperScape ®, July 2013; Kantar Retail analysis Also explore ways to help Walmart.com drive repeat trip frequency, as relatively few are regular visitors Opportunity to Convert Store Shoppers Though Walmart shoppers are just as likely to shop and buy online as others, they are much more likely to frequent Amazon.com than Walmart.com.

39. © Copyright 2013 Kantar Retail Source: Kantar Retail ShopperScape ®, January-September 2013 39 All Walmart Shoppers Walmart.com Shoppers Annual HH Income <$25K27%26% $25K - $49.9K27% $50K - $74.9K18% $75K - $99.9K11% $100K+17%19% Market Size Non- MSA/ MSA <500K34%35% MSA 500K - 1,999K22% MSA 2M+43% Kids in HH Children under 19 at home28%32% No children under 19 at home72%68% Cohort Gen Y (1982 to 2002)13%17% Gen X (1965 to 1981)31%34% Boomers (1946 to 1964)38%37% Seniors (born before 1946)18%12% Hispanic Yes12%13% Bolding/green highlighting indicates a significant difference between all Walmart Supercenter and Walmart.com shoppers (95% confidence level) All Walmart Shoppers vs. Walmart.com Shoppers Consider targeting Walmart.com appeals to these young families in- store by connecting to categories or media that they particularly seek. Walmart.com Shoppers Are Attractive Relative to all Walmart shoppers, Walmart.com’s shopper is younger and more likely to have kids. Contrary to popular stereotypes, they are not more affluent or urban, signifying that online appeals should be refined accordingly.

40. © Copyright 2013 Kantar Retail Walmart.com cross-shopping down from 2007 : –eBay –Target.com –Category specialists (e.g., Best Buy, Office Depot) Walmart.com cross-shopping up from 2007: –Amazon.com –Department stores (e.g., Macy’s, Kohl’s) –Lowe’s –Drugstores –Apple 40 Source: Kantar Retail ShopperScape ®, January- September 2007 and 2013, Kantar Retail analysis Jan-Sept 2007 Jan-Sept 2013 PPD 2013 vs. 2007 Amazon.com44%73%29.1 eBay.com43%39%-4.3 Target36%30%-5.9 Best Buy30%24%-6.1 JCPenney25%23%-1.8 Kohl's15%22%6.6 The Home Depot21% 0.1 Lowe's17%20%3.2 Sears16% 0.3 Barnes & Noble18%16%-1.9 Macy's11%16%5.5 Kmart15%13%-1.2 Bed Bath & Beyond13%12%-0.2 Staples15%12%-3.0 Toys "R" Us13%12%-1.6 Old Navy13%11% Walgreens9%11%2.2 Apple5%11%5.4 Bath & Body Worksn/a11%n/a Sam's Club10%9% Zappos.comn/a9%n/a Victoria's Secret/Pink9%8%-0.6 CVS/pharmacy7%8%1.4 QVC9%8%-1.1 Office Depot15%8%-6.9 Top 25 Retailers Cross-Shopped Online by Walmart.com Shoppers Bolding/green highlighting indicates a significant year-to-year difference (95% confidence level) Its Biggest Online Competitor Is Amazon.com Those shopping on Walmart.com are most likely to also shop Amazon.com, with eBay and Target.com falling behind as distant second and third choices.

41. © Copyright 2013 Kantar Retail 41 Source: Kantar Retail ShopperScape,®, March 2013 Note: Boxes indicate activities in which Walmart shoppers are significantly more likely to engage vs. all shoppers (95% confidence level) Given the popularity of these various shopping activities, consider ways to connect these actions to trip planning for the Supercenter. Online Is Also Enhancing the Store Experience Walmart shoppers are as likely as others to have a smartphone, enabling digital interactions in the store. The retailer’s shoppers are particularly likely to use their device to seek advice and search for coupons.

42. © Copyright 2013 Kantar Retail 501 Boylston Street Suite 6101 Boston, MA 02116 F +1 630 245 5647 www.KantarRetailiq.com 585 S. Front Street Suite 50 Columbus, OH 43215 F +1 630 245 5647 www.KantarRetailiq.com Robin Sherk Director, Retail Insights Robin.Sherk@KantarRetail.com Rachel McGuire Senior Analyst Rachel.McGuire@KantarRetail.com