Private LabelManufacturers AssociationFeb 2013

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AGENDA

1. Customer and Manufacturer Mindset

2. The Market

3. Private Label Performance

4. Christmas Snap Shot

CUSTOMER AND MANUFACTURER

MIND SET

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Consumer Confidence continues to erode, with bleak

outlook for coming year

Manufacturer Outlookis divided, but pessimistic about current trends and activities

Trade Spend is reaching saturation point and no longer delivering on its promise

Retailer Relationshipsare being damaged by perceived

power and cost imbalances

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feel they need to cut back on Trade Spend, compared to 38% who see it boosting ROI.

38%39%65%25%

of consumers think we are in a recession – 6% more than in Q4 2009.

of manufacturers feel that business conditions have declined since this time last year

of manufacturers consider their relationship with Woolworths to be “Poor” or “Very Poor”.

THE MARKET

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AUSTRALIAFast Moving Consumer Goods market dynamics | Scan Data

Nielsen Scan Data based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. In most cases this reflects 60 – 80% of all Longlife categories. For Australia, this is 75% of categories.

Australia continues to experience a slowing rate of FMCG price inflation, which is a recurring pattern in other countries in the region.

2010

-Q1

2010

-Q2

2010

-Q3

2010

-Q4

2011

-Q1

2011

-Q2

2011

-Q3

2011

-Q4

2012

-Q1

2012

-Q2

2012

-Q3

2012

-Q4

2.5% 2.8%3.6%

4.0%4.7%

4.1%

2.5% 2.7% 2.4% 2.1% 2.0%1.2%

0.4%0.4%

1.2%

1.5%

2.3%

1.5%

0.2%0.3%

-0.9%

0.5%0.2%

1.0%

2.9%3.2%

4.8%

5.5%

7.0%

5.6%

2.7%3.0%

1.5%2.6%

2.2% 2.2%

Unit value change Volume change Total Growth

2009

2010

2011

2012

3.4%

3.3%

3.3%

1.9%

3.5%

0.9%

0.7%

0.4%

6.9%

4.2%

4.0%

2.3%

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IN-MARKET SUCCESS AS COLES CONTINUES TO CLOSE THE GAP ON WOOLWORTHS

Market Share % by Retailer 2012 (vs. 2011)

7.6%+ 0.6

29.0%+ 0.5

38.2%+ 0.1

7.7%

- 0.5

Source: Nielsen | Homescan, Total Australia, MAT to

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COLES ENJOYING BROAD SUCCESS ACROSS ALL SOCIO-DEMOGRAPHIC CLUSTERS FOLLOWED BY ALDI

HIGHIncome

HIGHDensity

LOWIncome

LOWDensity

Families

Singles & Couples

High Income Med Income Low Income

Retailer % Growth Vs Total AUS – 2012

RETAILER GROWTH % AHEAD OF TOTAL AUS

Source: Nielsen | Homescan, Total Australia, MAT to

LETS TALK PRIVATE LABEL!

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21.0 21.1 21.4 21.1 21.0 20.3 20.4 20.5

16.8 17.5 17.4 17.4 17.4 17.9 17.9 18.3

94.2 93.9 93.5 93.6 93.7 93.5 92.5 90.7

22.8 23.5 23.7 23.7 23.5 23.9 24.0 24.1

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

10

20

30

40

50

Qtr to30/04/2011

Qtr to30/07/2011

Qtr to29/10/2011

Qtr to28/01/2012

Qtr to28/04/2012

QTR to28/07/2012

QTR to27/10/2012

QTR to26/01/2013

Coles Woolworths T. Supermarkets Aldi

% VALUE SHARE OF PRIVATE LABEL TO TOTAL PACKAGED GROCERY SALES

Private Label has gained an increase in Share in WOW.Small decrease in PL Share for Coles.Branded products highly increasing their share in Aldi

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Start up families increasing their spend on private labels faster than other demographic groups

Families Share on Private Label Trended, Total Supermarkets

QTR to 30/04/2011

QTR to 30/07/2011

QTR to 29/10/2011

QTR to 28/01/2012

QTR to 28/04/2012

QTR to 28/07/2012

QTR to 27/10/2012

QTR to 26/01/2013

22

23

24

25

26

27

28

22.8

23.5 23.7 23.7

23.5

23.9 24.0 24.1

23.0

24.1

25.3

25.7 25.5

26.2

26.9 26.6

25.0

25.6 25.8 25.7 25.7

26.2 26.0 26.1

24.6

25.5 25.2 25.2

25.4

26.0

25.6

25.1

Total Australia Start-up Families Small Scale Families Bustling Families

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CUSTOMERS BUYING MORE , PENETRATION INCREASES AND OVERALL SHARE INCREASING

-4.2%-4.2%

PenetrationPenetration AWOPAWOP PL VAL SharePL VAL Share

Homescan QTR to 26/01/2013

+6.0%+6.0%

+0.9%+0.9%+1.0%+1.0%

Source: Nielsen | Homescan (Australia) – Issue# 600652/600654

Q4 2012 Nielsen Private Label Report

-6.0%-6.0%

+4.6%+4.6%

+0.0%+0.0% +8.4%+8.4%

+2.1%+2.1%

+2.8%+2.8% -3.4%-3.4%

-5.6%-5.6%

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Purchased in National brands

Promotional Vulnerable PL

Purchased primarily in Private Label

Pet Food Coffee

Milk Ice Cream

Block CheeseConvenience Frozen

Soft Drinks Medicinal ProductsBiscuits And Cookies Frozen Vegetables

Chilled Desserts Vitamins

Confectionery Toilet Paper

Cereal Chilled Spreads

SnacksHeat And Eat Frozen

Packaged Bread In store Bread

8

5

7

Shopping list

THERE ARE 20 CATEGORIES WHICH ACCOUNT FOR 50% OF THE HEAVY PRIVATE LABEL BUYERS SPEND OVER A YEAR IN AUSTRALIA

CHRISTMAS SNAP SHOT

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Strong Christmas Theme:Fresh and ValueAll Your Needs for Christmas

Strong Christmas Theme:Quality and FreshAll Your Needs for Christmas

CHRISTMAS THEMES

Strong Christmas Theme:Fun and Lowest Prices

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Share of Trade

Growth in Media Spend

Share of Trade: Source: Nielsen Homescan, 13 weeks to 29/12/2012. Media Spend: Source: Nielsen Media, 8 weeks to 29/12/2012, data derived from free-to-air channel rate cards after discounts applied. Discounts are derived on a per advertiser basis, based on industry body information. Nielsen aims for this measure to be as accurate as possible, but deviation from the total universe may occur. Shopper Trends: Source: Nielsen Customized Research (CR), based on January telephone survey from a CR Panel (separate to the Homescan panel) (n = 3007 for location of shopping question, n = 3358 for best supermarket winner question).

Thinking about your overall experience (including out-of-store marketing), who do you think should ‘win’ the best Overall Supermarket for Christmas 2012?

At which of the following supermarkets did you complete the majority of your Christmas shopping?

37.7% 29.0% 8.1%-4.9% +14.3% +143.8%

1st (28%) 2nd (24%) 3rd (14%)

1st (37%) 2nd (30%) 3rd (10%)

Aldi performing ahead of expectation over the Christmas period.

CHRISTMAS SHOPPER TRENDS

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28Shopper Trends: Source: Nielsen Customized Research, based on January questionnaire (n = 2953).

Aldi’s performance over Christmas has been driven in some area’s that aren’t traditional Aldi strengths.

CHRISTMAS SHOPPER TRENDSWhich of the following reasons describe why you chose to shop at your chosen retailer for the majority of your Christmas shop?

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ALDI stocked more branded items this Christmas than ever before – offerings which were on average 75c cheaper than WOW and $1.19 cheaper than Coles.

Time periods are 13 weeks. 2012 to week ending 29/12/2012, 2011 to week ending 31/12/2011, 2010 to week ending 01/01/2011. Source: Nielsen Homescan

The New ALDI Buyer Penetration AWOP ($) Avg Price ($) Per UnitPerceived % Value on

Promo2011 2012 +/- 2011 2012 +/- 2011 2012 +/- 2011 2012 +/-

Australia 76.5 83.2 6.7 21.84 25.14 3.30 4.37 4.48 0.11 48.9 52.1 3.1Woolworths 45.9 47.9 2.1 16.72 16.73 0.01 4.48 4.32 -0.15 50.7 52.8 2.1Coles 38.5 41.7 3.2 15.81 18.18 2.37 4.20 4.76 0.57 48.6 56.7 8.1ALDI 0.0 16.8 16.8 0.00 11.36 11.36 0.00 3.57 3.57 0.0 24.4 24.4

2011 2012Market Share ($)

45.9%38.3%

36.4% 36.2%

0.0%9.1%

WoolworthsColesALDI

-7.8%

Retailer share amongst Aldi’s branded Christmas stock

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10% share of eastern seaboard

Strength is price

Range = 1200 items

Basket size is 90% of WW / Coles

Strong in fresh

Skewed towards families

Strongest rel’ship with suppliers

Brightest future according to Aust. Suppliers

Plans to open in South & Western Australia

50% of household’s shopping

300stores

ALDI

SUMMARY OF TRENDS

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SUMMARY OF TRENDS

• Consumer and Manufacturer confidence continues to erode, with bleak outlook for coming year.

• Coles & Aldi winning in the market – both attracting Woolworths key shoppers

• PL continuing to grow in the Australian market, but growth slowing as market becomes more mature

• Private Label growth opportunities increasingly focused on more premium non-traditional areas

• Balancing both Private Label & Branded important to retailers in winning Christmas

• Aldi growth into SA & WA likely to increase the acceptability of Private Label within the Australian market

THANKYOU