1. Pet category Opportunities of the Pet Center

2. Pet Care is a LARGE category Pet Category = $44 billion in 2008 (all outlets) Source: Consumer & Marketplace insights, APPA 2009, NPPC Total Mkt Document 2009, Nielsen Custom Channel Facts 2008 Pet Services, Other Food, Litter, Supplies $16.4 B $28.2 B

3. Pet Care has achieved consistent growth Source: NPPC Total Mkt Document 2009 5% - 5.4% $30.6B $14.3B

4. Pet Care reaches the majority of households of all U.S. households buy in Pet Care 74% 2.5x Pets are found in more households than Kids Source: Consumer & Marketplace Insights

5. Customers likely to leave the grocery store for supercenters are typically large basket shoppers with a pet at home and an infant in the family. Shoppers with pets and children may be our most important target. The pet shopper is more valuable across the whole store spending 24% more per trip. Retailers that build on an emotional connection could drive 32% more visits and 46% more spending per trip. The Pet Shopper:

6. Satisfied with no emotional connection 4.1 trips and $144 per month. Satisfied with and emotional connection 5.4 trips and $210 per month. 93% of pet owners say the pet is part of the family. Pets live for an average of 19 years. Baby category is 3 years respectively. More US households have pets (63%) than kids (35% but only 7% under 5 yrs.). The Pet Shopper:

7. What a Pet Shopper wants: Make it easy for me to shop Less is more Help me understand all this stuff Show me what’s new Emotion and function Attitude about grocery

8. Pet owner shopping behavior is highly influenced by four trends: Wellness Convenience Indulgence (more than just premium food (natural/organics, prepared meals, small spaces litter, elegant medleys). Pet humanization

9. Merchandising ideas: Keep species together Impulse buys increase by keeping big dog, small dog, etc. items together. (i.e. large dog food with large biscuits and large rawhides.) Hurried shoppers hit the perimeter, not the aisles. Option for pet merchandising around perimeter near staple items. Cross promoting for segment strengths: Dry = high dollar rings Wet = more frequent trips Treats = impulse The role of specialty items is not sales but to showcase a retailer as an expert.

10. Consumers are LEAST motivated to trade down in Pet vs. all other categories tracked... Source: Yankelovich Dollars and Consumers Sense study - Wave 2 Q109

11. Packages:

12. Overhead signage creates a department sense and guide shoppers

13. Navigation elements within the aisle helps shoppers understand where they find each pet related category quickly and easily

14. Information delivery assists shoppers in making decisions between items and gives them confidence that the retailer knows and cares about pets

15. Integrated endcap executions act as an entry to the department and are often used to showcase new or exciting pet items. Test stores that have end caps incurred a growth of 23% more dollar sales, 34% more unit movement and 23% gross margin dollar increase than without (vs. 21%).

16. Basic Package Blue Make my customer aware of pet products.

17. All packages will include these basic elements: overhead signage, navigational elements, end cap entry.

18. Basic Package Red Make my customer aware of pet products.

19. All packages will include these basic elements: overhead signage, navigational elements, end cap entry.

20. Enhanced package Blue Pet care is an important opportunity for me.

21. All packages will include these basic elements: overhead signage, navigational elements, information delivery, end cap entry.

22. Optional elements

23. Enhanced package Red Pet care is an important opportunity for me.

24. All packages will include these basic elements: overhead signage, navigational elements, information delivery, end cap entry.

25. Optional elements

26. Premium package I am a pet expert.

27. All packages will include these basic elements: overhead signage, navigational elements, information delivery.

28. Optional elements

29. End Caps: This is the door to my pet world, enter here. Displays also remind customers that skip aisles of pet care, encourage incremental sales and help the perceived value with competitive pricing.