kantar consumer research, march 2012

© Kantar Worldpanel

ROI GROCERY MARKET REVIEW– Data to 18th March 2012


OVERVIEW

Market Overview• The annual market sales are ahead of last year, with

growth of +0.2% year-on-year.

• Over the shorter term, market value has declined 0.5% as shoppers buy more volume despite price inflation, and compensate by purchasing on offer and trading down to cheaper lines.

• Consumers are making more shopping trips, but the average spend per trip has reduced by 3.7%.

• Private label continues to be important as a method of reducing spend with a market share at 35.4%.


KANTAR WORLDPANEL: DATA TO 18th March 2012

The Irish grocery market is in growth over 52w by just +0.2%. Over 12w, the grocery market is in decline of -0.5% in comparison to same period last year.

Total Grocery - market value & YoY %chg

€8,946,826 €8,884,903 €8,900,643

€1,966,316 €1,983,684 €1,973,568

52 w/e 21 Mar 10

52 w/e 20 Mar 11

52 w/e 18 Mar 12

12 w/e 21 Mar 10

12 w/e 20 Mar 11

12 w/e 18 Mar 12

€000

s

-0.7% +0.2% +0.9% -0.5%



12w Total Grocery - sectors value shares & YoY %chg

Fresh & Chilled Produce

49%

Ambient Food 28%

Household 7%

Frozen 5%

Alcohol 6%Toiletries 4%

Healthcare 2%

Share of total trolley

Total Trolley

-0.5% value

-0.5

3.6

-1.6

-4.4

-6.5

-0.9

0.3

0.0

Total Grocery

Alcohol*

Healthcare

Household

Toiletries

Ambient Food

Fresh & Chilled

Frozen Food

Quarterly, the majority of markets falls back while Alcohol has a strong performance this quarter



12w Total Grocery - value % chg by category

Hot Beverages, Fresh Fish and Chilled Drinks have performed best year on year.



12w Total Grocery - pack % sold on deal by category

Alcohol, Drinks and Snacks have the highest proportion of packs sold on deal. Staples such as Dairy, Bakery and Canned Goods have lower promotional levels



12 w

/e 3

0 Dec

07

12 w

/e 2

4 Feb

08

12 w

/e 2

0 Apr

08

12 w

/e 1

5 Ju

n 08

12 w

/e 1

0 Aug

08

12 w

/e 0

5 O

ct 0

8

12 w

/e 3

0 Nov

08

12 w

/e 2

5 Ja

n 09

12 w

/e 2

2 M

ar 0

9

12 w

/e 1

7 M

ay 0

9

12 w

/e 1

2 Ju

l 09

12 w

/e 6

Sep

09

12 w

/e 0

1 Nov

09

12 w

/e 2

7 Dec

09

12

w/e 2

1 Feb

10

12

w/e 1

8 Apr

il 10

12 w

/e 1

3 Ju

n 10

12w/e

08

Aug 1

0

12 w

/e 0

3 O

ct 1

0

12 w

/e 2

8 Nov

10

12 w

/e 2

3 Ja

n 11

12 w

/e 2

0 M

ar 1

1

12 w

/e 1

5 M

ay 1

1

12 w

/e 1

0 Ju

l 11

12 w

/e 0

4 Sep

11

12 w

/e 3

0 O

ct 1

1

12 w

/e 2

5 Dec

11

12 w

/e 1

9 Feb

12

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Markets in Deflation Markets in Inflation

12w Total Grocery – proportion of markets in growth & decline

While inflation is still very evident, it begins to fall back slightly, impacting on consumer spend



% change year on year – 12 weekly period

Change in Household Spend and Inflation rate Household Spend has dropped back by -0.5% YoY as inflation rate slows



The average individual disposable income is €21,010

as we enter 2012.€3,370 less than in 2008, and €1,150 less than last

year (2010).

Source: CSO Household Budget Survey

With less disposable income, shoppers are looking for ways to cut back in any way they can and grocery is no exception



12w Total Grocery - consumer coping strategies trended

Shoppers are buying more volume this year, in order to reduce spend, they are purchasing on offer and trading down product lines

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

30th

Dec

07

27th

Jan

0824

th F

eb 0

823

rd M

ar 0

820

th A

pr 0

818

th M

ay 0

815

th Ju

n 08

13th

Jul 0

810

th A

ug 0

807

th S

ept 0

805

th O

ct 0

802

nd N

ov 0

830

th N

ov 0

828

th D

ec 0

825

th Ja

n 09

22nd

Feb

09

22nd

Mar

09

19th

Apr

09

17th

May

09

14th

Jun

0912

th Ju

l 09

09th

Aug

09

06th

Sep

09

04th

Oct

09

01st

Nov

09

29th

Nov

09

27th

Dec

09

24th

Jan

1021

st F

eb 1

021

st M

ar 1

018

th A

pr 1

016

th M

ay 1

013

th Ju

ne 1

011

th Ju

ly 1

008

th A

ug 1

005

th S

ep 1

003

rd O

ct 1

031

st O

ct 1

028

th N

ov 1

026

th D

ec 1

023

rd Ja

n 11

20th

Feb

11

20th

Mar

11

17th

Apr

11

15th

May

11

12th

Jun

1110

th Ju

l 11

07th

Aug

11

04th

Sep

11

02nd

Oct

11

30th

Oct

11

27th

Nov

1125

thD

ec11

22nd

Jan1

219

thFe

b12

18th

Mar

12

Promotion/Product Change Store Choice Inflation Volume per buyer HH Spend Change



Grocery Volume Growth by Price Brand

13.1

14.1

33.5

20.1

19.3

% Volume

Super Premium

Premium

Good

Standard

Budget

Growth in Grocery sales (Volume)

14.6 15.0

-1.3

5.8

-6.3-10.0

-5.0

-

5.0

10.0

15.0

20.0

Budget (Median -50%)

Standard (Median -25%)

Good (Median price)

Premium (Median +25%)

Super Prem (Median +75%)

Change in sales Share of sales

Strong growth in budget products as shoppers trade down price tier


KANTAR WORLDPANEL: DATA TO 18th March 201212 w/e to 22nd Jan 2012

23 Mar

08

20 Apr 08

18 May

08

15 Jun 08

13 Jul 0

8

10 Aug 08

07 Sep 08

05 Oct 08

02 Nov 08

30 Nov 08

28 Dec 08

25 Jan 09

22 Feb 09

22 Mar

09

19 Apr 09

17 May

09

14 Jun 09

12 Jul 0

9

09 Aug 09

06 Sep 09

04 Oct 09

01 Nov 09

29 Nov 09

27 Dec 09

24 Jan 10

21 Feb 10

21 Mar

10

18 Apr 10

16 May

10

13 Jun 10

11 Jul 1

0

08 Aug 10

05 Sep 10

03 Oct 10

31 Oct 10

28 Nov 10

26 Dec 10

23 Jan 11

20 Feb 11

20 Mar

11

17 Apr 11

15 May

11

12 Jun 11

10 Jul 1

1

07 Aug 11

04 Sep 11

02 Oct 11

30 Oct 11

27 Nov 11

25 Dec 11

22 Jan 12

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

% of sales accounted for by round €

The prevalence of mechanics such as round euro pricing shows the importance of deals to the Irish grocery market

Share of sales has stabilised over the last

year averaging at 11% of Total Grocery



12w Total Grocery - changes in consumer shopping behaviour

Average frequency increased by

+3.3%

Average frequency increased by

+3.3%

Average basket spend reduced by

-3.7%

Average basket spend reduced by

-3.7%

€6 decrease in 12w spend per HH

(-0.5%)

€6 decrease in 12w spend per HH

(-0.5%)

Irish households are shopping more often this year, but spending an average of €0.80 less per trip as a result of promotions and trading down



Trolley

10+ items

Basket

4-9 items

Destination

1-3 items

% o

f gro

cery

spe

nd

2010

58.7%

36.9%

4.4%

2011

58.5%

37.3%

4.2%

Growth in the number of shopping trips across Ireland continues to put more emphasis on smaller basket shops



12w Total Grocery – PL value%

Private label continues to be important as a method of reducing spend and now sees the highest share in two years of Irish grocery



What kind of consumer trends are we seeing

evidence of?



62% agree: I try to buy local

61%: nutrition impacts

49%: family breakfast (32%)87%: sunday lunch (72%)76%: Saturday meal (60%)

In the current climate, more emphasis is placed on traditional values

More emphasis on doing our bit for the economy and buying

local

Health is becoming more important in the minds of consumers

More emphasis on in home occasions

% of shoppers agreeing to the statements

Source: KWP lifestyle and attitudes survey 2011



UK Market Overview

http://www.insidekantarworldpanel.com/Resources/Picture%20Library/Shopping_basket.jpg



UK CURRENT THEMES

• Product choice is still the main strategy for trading down

• Inflation still evident in UK grocery and average spend per household is in

growth

• Value Own Label is now gaining from all other tiers

• Own label still remains strong in UK



UK Inflation and household spend change

Inflation is also a factor in UK grocery while average spend per household is in growth

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Inflation

HH Spend change



-4

-3

-2

-1

0

1

2

3

42

6-D

ec-

10

23

-Ja

n-1

1

20

-Fe

b-1

1

20

-Ma

r-1

1

17

-Ap

r-1

1

15

-Ma

y-1

1

12

-Ju

n-1

1

10

-Ju

l-1

1

07

-Au

g-1

1

04

-Se

p-1

1

12

-Oct

-11

30

-Oct

-11

27

-No

v-1

1

25

-De

c-1

1

22

-Ja

n-1

2

19

-Fe

b-1

2

18

-Ma

r-1

2

Co

ntr

ibu

tion

to

gro

wth

%p

ts

Volume change Store Choice Promotions Product Choice

Cheaper products remain the main way for shoppers to manage their spend

Total Grocery 12 we 18 Mar 2012 (KWP P04)

TRADING UP AND TRADING DOWN STRATEGIES



Grocery Packs Growth by Price Band

27.5

22.3

31.6

10.8

7.8

Share

SuperPremium

Premium

Good

Standard

Budget

Growth in Grocery sales (Packs)

-0.1

4.7

6.3

-3.5

-7.9

-6.5

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

AllPurchases

Budget Standard Good Premium SuperPremium

Change in sales Share of sales

Cheaper price tiers also seeing growth in UK



Standard Own Label

Branded

Value Own Label

Premium Own Label

Switching limited to Big 4 retailers and 4 tiers

Shoppers trading down from brands and down the Own Label tiers

Total Grocery 12 we 18 Mar 2012 (KWP P04)

NET SWITCHING THROUGH PRICE TIERS IN THE BIG 4 UK RETAILERS

kantar consumer research, march 2012

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