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How can we drive growth in dynamic or challenging times? At a time when some are stating that “flat is the new up”, we will discuss growth opportunities with respect to: 1. Staying connected with winning retailers & categories 2. Engaging in digital retailing & digital shopping 3. Winning the trip through precision marketing & sales focused against shoppers that matter 4. Driving the health & wellness growth wave 5. Winning the occasion – whether it be an eating occasion, seasonal period, or personal/home cleaning occasion.

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So which consumer-packages-goods retail channels drive the largest sales and greatest growth? What retailers are winning the battle of same-store-sales growth?

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Is slow or flat sales growth the best we can expect? Over the past five plus years, the only dollar growth we experienced came in 2011 (+4%) and 2012 (+3%) when inflationary pressures had retailers accepting manufacturer price increases as well as passing on increases on their products too. Over the past two annual periods, dollar sales are up 2% and unit sales have been flat for the last three annual periods. In an economic recovery, shouldn’t we expect more growth or is flat the best we can expect? 52 weeks ending 01/01/2011 52 weeks ending 12/31/2011 52 weeks ending 12/29/2012 52 weeks ending 12/28/2013 52 weeks ending 12/27/2014

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We see a turnaround for some retailers while others struggle. When we examine same-store-sales* trends (excluding gasoline sales) as reported by U.S. retailers in the latest 52-week period versus 2009 (the bottom of U.S. retailing performance since the great recession began in December of 2007), we see how these trends reflect consumer actions and we also we see how far some retailers have improved their positions as evidenced by a wide swing in this metric. Costco, Home Depot and Walgreens are driving the strongest growth. Nordstrom and Macy’s return to growth, while Kohl's and Kmart struggle. Dollar General and Dollar Tree are still posting gains, but Family Dollar has gone negative and all are showing slower growth versus 2009. Consumers appear to think it is time to get back into home remodeling and improvement as growth has returned to Home Depot and Lowes. Whole Foods, Nordstrom, Home Depot, Dollar Tree, Costco, Walgreens, Target and Kroger are outperforming their peers in their respective retail channels. Home Depot, Whole Foods, Lowe’s, Nordstrom, and Macy’s have exhibited the most positive turnaround from 2009 to the latest 52 weeks. CVS, Dollar Tree, Dollar General, Petsmart, Sam’s Club, Kohl’s, Petsmart, Family Dollar, and Kmart have exhibited the weaker performance versus 2009. *Sales in stores open for at least one year within a retail chain. Last update: 3/13/2015

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But a number of publically traded grocery chains are posting solid same-store-sales growth in the latest 52 weeks. *Sales in stores open for at least one year within a retail chain. Last update: 2/12/2015

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1. U.S. Census Bureau Source: Advance Monthly Sales for Retail and Food Services 4451: Grocery Stores: U.S. Total Seasonally Adjusted Sales – Monthly Period: 1992 to 2015 Data Extracted on: March 9, 2015 (7:18 pm)

2. U.S. Census Bureau Source: Advance Monthly Sales for Retail and Food Services 722: Food Services & Drinking Places: U.S. Total Seasonally Adjusted Sales - Monthly Period: 1992 to 2015 Data Extracted on: March 9, 2015 (7:19 pm)

Source: http://www.census.gov/econ/currentdata/dbsearch?program=MARTS&startYear=1992&endYear=2015&categories%5B%5D=722&dataType=SM&geoLevel=US&adjusted=1&submit=GET+DATA US Restaurant Spending Beats Supermarket Spending For First Time Monday, March 09, 2015—Yahoo! Food reports that "by a nose, American dollars spent at restaurants and bars outstripped those plunked down in grocery stores in January, a first since the Census Bureau began tracking data in 1992 ... More than two decades ago, Americans spent $162 in groceries for every $100 they spent in restaurants. But this past January, they spent nearly equal amounts of money in both places: $50.475 billion in restaurants and bars, and $50.466 billion in grocery stores." “I think it’s a combination of a recovering economy and changing eating habits,” says Mark J. Perry, a University of Michigan economics and finance professor, suggesting that lower gas prices have helped provide people with disposable income with which to eat out. Plus, he says, "The role of the restaurant has changed in society. It’s less of a special occasion [destination], and even for some people, like me, eating out is an everyday occasion." KC's View: This speaks to a lot of things ... in part, the rebounding economy, but also the inability of a lot of people to cook, the lack of time to actually prepare a meal, and the degree to which at least some restaurants seem to have successfully adopted the "third place" strategy that has helped drive the growth of companies like Starbucks in recent years. And, I think it points to a major challenge facing many American supermarkets ... because if restaurants are growing their share of stomach, somebody has to be losing. SOURCE: http://morningnewsbeat.com/News/Detail/46498/2015-03-09 U.S. Regular All Formulations Retail Gasoline Prices (Dollars per Gallon) Data source – Gasoline – All Grades – Regular: http://www.eia.gov/beta/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_NUS_DPG&f=M Root: http://www.eia.gov/petroleum/gasdiesel/\

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Here are calendar year or fiscal year 2011 versus 2014 comparable store sales growth figures (from stores open at least 12 or 18 months depending on the chain) for a variety of restaurant chains. While we see more growth than losses in both years; only six chains (Chipotle, Domino’s, Papa John’s, Sonic Drive-in, IHOP, and Denny’s) experienced greater growth in 2014 from 2011. And four chains (Bonefish Grill, McDonald’s, Carrabba’s Italian Grill and Famous Dave’s) saw their comp sales drop significantly in 2014 (i.e. by more than fiver percentage points). Updated 02/26/215 Notes: Darden Specialty restaurant Group includes: The Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s, and Yard House. Company Owned stats from Wendy’s, Famous Dave’s and Bloomin Brands. 2014 figures represent annual or first three or four quarters of 2014 as not all companies have reported year-end as of this date.

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The value and convenience channels are driving stronger growth, but not much of a growth gap between channels. *Contractual agreements from cooperating retailers in these other channels prohibit Nielsen from reporting individual channel views. Note: These sales represent UPC-coded products across the universe of departments and categories coded by Nielsen. They exclude Rx (pharmacy) sales as well as gasoline sales.

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Supermarkets & drug sales off slightly in east, while value gains just below U.S. level *Contractual agreements from cooperating retailers in these other channels prohibit Nielsen from reporting individual channel views. Note: These sales represent UPC-coded products across the universe of departments and categories coded by Nielsen. They exclude Rx (pharmacy) sales as well as gasoline sales.

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Value & convenience are winning in the marketplace as evidenced by increased store count. Since December 2005, most store expansion (in terms of percentage increase in store count) has come from channels outside of traditional Food, Drug & Mass-Merchandise formats. Warehouse Clubs, Supercenters, Dollar Stores and C-stores continue expansion of store count. And since the end of 2014, we saw store count expansion in all channels but Mass Merchandisers – fueled by Walmart conversions to supercenters and Kmart store closings. Supermarkets have grown by 1,976 stores since 2005. However, as we will see, there has been a fair amount of store closings along with tear downs and re-builds in the channel and more than 72%* of the store growth has come from low- and high-end niche retailers such as Aldi, Save-A-Lot, Trader Joe’s, Fresh Market, Whole Foods, and Sprouts. Calculation does not include new deep-discount grocers from HEB, Giant Eagle, Delhaize, Kroger or Spartan). 50% of the niche store growth from Aldi & Save-A-Lot; 50% from the natural, organic and specialty retailers mentioned above. The addition of smaller chains in these formats show even stronger growth from niche supermarkets. 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.

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Within the major Mass and Grocery retailers, since 2005, Walmart and Target have led the way in terms of new store openings, while increases in the Grocery sector came from both acquisitions and new store openings. Publix has been aggressive in store expansion, with the acquisition of a number of Winn-Dixie formats as well as expanding store count in new (i.e., Charlotte and Knoxville) and existing markets. Only Walmart (206 new stores), Target (4), Publix (16), Kroger (227), and Albertson LLC (29) grew their store count from the end of 2013 to the end of 2014; store contraction (closing poor performers) and remodeling focus from these other grocers. Kroger’s count elevated in 2014 with the acquisition of Harris haleto01Teeter, but they have been very aggressive in opening new formats and tearing down and rebuilding or remodeling existing stores to get the most from their best store locations. Note: Counts represent corporate-owned grocery stores. Walmart cuts back U.S. supercenter growth, ups e-commerce spending October 15, 2014 | By Marianne Wilson | Bentonville, Ark. — Walmart is planning to sharply cut back the growth of its U.S. supercenters in favor of smaller-format stores and accelerated e-commerce and digital investments. The discounter told investors at its annual analysts meeting that it plans to open 60 to 70 supercenters during its next fiscal year, down from the planned 120 this year, and 200 to 220 smaller-format stores. FULL STORY: http://www.drugstorenews.com/article/wal-mart-cuts-back-us-supercenter-growth-ups-e-commerce-spending

FTC OKs Albertsons-Safeway merger

The Federal Trade Commission officially approved the merger of Albertsons and Safeway on Tuesday. The companies said that AB Acquisition LLC, an affiliate of Boise, Idaho-based Albertsons, planned to finish the acquisition of Safeway in the next five business days. Read More: http://supermarketnews.com/retail-financial/ftc-oks-albertsons-safeway-merger#ixzz3Q7anQUyn

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Niche grocers (deep discounters or natural/gourmet) are driving store count growth within Supermarkets and all grew store count in 2014 versus 2005 and versus 2013.

Supermarkets: Day of the discounters; No-frills grocery stores grab market share from rivals in Europe and prepare to do battle in the US December 10, 2014 ,7:35 pm--Aldi has also set up in Australia, and has quietly amassed 1,350 stores in the US, with plans to take this to 2,000 by 2018. Lidl is preparing to enter the US, making it the next big battleground for the German discounters. Aldi is the “sleeping giant” of US grocery retail, says Mike Paglia, a director of Kantar Retail. When it begins to joust with Lidl, “everyone will feel it in some way, shape or form”. Aldi is bracing itself for the arrival of Lidl in the US, investing an additional $3bn in the market through to 2018 under its own brand and buying discount chain Bottom Dollar from Delhaize, adding 66 stores. Aldi and Lidl are not the only retailers selling discount groceries. The dollar stores in the US, and Britain’s variety of pound shops, are all adding food to their range. FULL STORY: http://www.ft.com/cms/s/0/be5e8d52-7ec6-11e4-b83e-00144feabdc0.html#axzz3OLTiuw00

Whole Foods Market's (WFM) CEO John Mackey on Q4 2014 Results - Earnings Call Transcript Nov. 5, 2014 11:31 PM ET …our thoughts to 2015 and beyond…We are very excited about the stores opening this

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year, which reflect a range of sizes from 20,000 to 60,000 square feet. We will be expanding into six new markets, such as Ottawa, Canada, while invigorating our brand with new flagships in some of our older markets including Houston, Boston and New York City. FULL TRANSCRIPT: http://seekingalpha.com/article/2646805-whole-foods-markets-wfm-ceo-john-mackey-on-q4-2014-results-earnings-call-transcript

Lidl postpones plan to open U.S. stores to 2018 Mon Apr 28, 2014 10:57am EDT--BERLIN, April 28 (Reuters) - German discount supermarket chain Lidl has delayed a plan to enter the U.S. market until 2018 after the surprise departure of two top executives last month. Klaus Gehrig, chief executive of the Schwarz Group which owns Lidl, told German local newspaper Heilbronner Stimme that preparations to enter the United States were proceeding apace but the first stores were only planned for 2018. His comments were confirmed by a Lidl spokeswoman on Monday. FULL STORY: http://www.reuters.com/article/2014/04/28/germany-lidl-usa-idUSL6N0NK3XN20140428 ALDI Launches Accelerated Growth Strategy to Operate Nearly 2,000 US Stores By 2018 NEWS RELEASE: http://www.prnewswire.com/news-releases/aldi-launches-accelerated-growth-strategy-to-operate-nearly-2000-us-stores-by-2018-236713141.html Report: Whole Foods sees potential for 1,200 U.S. stores | December 18, 2013 | By Dan Berthiaume -- Whole Foods is reportedly planning to open 1,200 new stores across the United States. FULL STORY: http://chainstoreage.com/article/report-whole-foods-sees-potential-1200-us-stores Why Aldi and Lidl Have What It Takes To Beat The Best and The Biggest | 10/30/2013 | Today, Aldi Nord already has 1,188 stories in the United States and 270 in Australia; while Aldi Süd has more than 370 Trader Joe’s stores in the United States. Lidl has 11 stores in Cyprus, 5 stores in Malta; while Lidl is not yet in the United States, it is a target market. FULL STORY: http://www.forbes.com/sites/walterloeb/2013/10/30/why-aldi-and-lidl-have-what-it-takes-to-beat-the-best-and-the-biggest/

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Greater store expansion across a wide number of regional supermarket chains. These smaller and more nimble chains, with a strong understanding of their shopper, are experimenting with new formats and are expanding into new markets. Note: Fresh & Easy now owned by U.S. company, not by U.K. retailer Tesco, but historical store counts kept in chart.

Hy-Vee gets final approval to open first Twin Cities store next year Sep 23, 2014, 2:47pm CDT Hy-Vee's first Twin Cities supermarket is a go. Hy-Vee first announced that it would enter the Minneapolis-St. Paul market in February. FULL STORY: http://www.bizjournals.com/twincities/news/2014/09/23/hyvee-new-hope-grocery-store-approved-land-deal.html Meijer set to open first Wisconsin stores this summer January 28, 2015 FULL STORY: http://www.drugstorenews.com/article/meijer-set-open-first-wisconsin-stores-summer Haggen to Expand from 18 Stores to 164 Stores with Major Acquisition December 19, 2014 FULL STORY: NEWS RELEASE: http://www.haggen.com/press-releases/haggen-expands/

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Let’s now examine trends in buying behavior by examining trends in department and category sales.

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For the 52-week period ending 12/27/2014 versus FOUR YEARS AGO, dollar volume increased by $79.1 billion (a 11% increase in sales). That growth was a function of absolute dollar volume growth in 244 mega-categories (generating $83.8 billion in gains), while dollar sales fell in 98 categories (generating $10.4 billion in losses). Over the past four years, salty snacks, new age beverages, and beer & malt based beverages had the biggest gains in absolute dollar sales -- and demand shifts are behind these shifts in spending. Salty snacks tops the list as we have increased snacking occasions at the expense of main meals. Growth in fresh produce as we look to lead healthier lifestyles, but inflationary pressures at work here as well. Candy an coffee have experienced a lot of price pressure from high commodity input costs, but they have also responded with innovation – particularly in premium segments. In terms of categories with the biggest losses: • Rather than purchase recorded moves on CDs, consumer demand has shifted to downloading via

the internet. • Many consumers are using their smartphones as a replacement for a computer and software

downloads come via the internet, so a decline in computer software sales. • Those smartphones are also being used to take pictures, so look at what has happened to camera

and film sales. • We are reading more on-line, so a decline in magazine sales. • The ready-to-eat cereal category is still huge, but consumers are changing their breakfast eating

habits and cereal is losing sales. Hershey bites into premium meat snacks market with acquisition of KRAVE jerky By Elaine WATSON, 29-Jan-2015—Hershey has moved into the premium end of the meat snacking market with the acquisition of Sonoma, CA-based gourmet jerky maker KRAVE Pure Foods for an undisclosed sum. Source: http://www.foodnavigator-usa.com/Manufacturers/Hershey-enters-meat-snacks-market-with-KRAVE-jerky-deal

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Inflationary pressures from rising commodity prices has driven growth in some major departments, but consumer demand a driving force too – particularly in departments like fresh produce, deli and alcoholic beverages. Elevated prices and increased demand in some segments drive fresh meat dollar growth. We are also seeing an increase in fixed-weight/prepackaged fresh meat – products that used to be random-weigh using PLU codes rather than UPC’s.

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In terms of unit trends, trends are generally softer versus dollar trend metrics as consumers continue to make trade-offs or buy less – particularly in center store categories. Unit growth in perimeter departments speaks to the stronger consumer perception around fresher offerings in those departments as well as areas of the store receiving a great deal of retailer focus. We are also seeing an increase in fixed-weight/prepackaged fresh meat – products that used to be random-weigh using PLU codes rather than UPC’s. So growth is much less across total department

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The weakness in center-store department growth is in part a function of the fact that consumers are flocking to fresh departments. Thanks to the Nielsen Perishables Group, here is a view of the fresh meat, seafood, produce, bakery and deli volume and dollar sales from their Fresh Coverage Area, or FCA data universe. The FCA includes key retailers from Food, Mass/Supercenter and Club chains, or more than 18,000 stores across the U.S. It excludes the convenience, dollar, military and drug channels. The point-of-sale data is aggregated from a store, item, weekly level. Data is for all products sold in the fresh departments, both standard (UPC) and retailer-assigned (PLU and system 2). For the 52-week period ending 12/22/2014, inflationary pressures and increased demand are driving dollar growth in most segments of the perimeter or fresh departments. Volume growth occurred in all but remained flat for fresh deli meat and meat and fresh seafood decreased (where prices were up 11%). Although prices are up in most fresh departments, strong dollar growth along with volume gains speaks to strong consumer demand driving the perimeter – particularly in deli prepared foods! Note: Miscellaneous Other Bakery is not included in the data pull, this super-category includes bakery ingredients, bread crumbs, stuffing, candles and non-specific bakery items.

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Nielsen Perishable Group illustrates the growth in deli-prepared foods and how growth continues as shoppers choose meals and meal components over ingredients. Prepared Foods from Retail Will Grow Twice As Much as Restaurant Visits Over the Next Decade, Reports NPD Chicago, July 16, 2013 — Home meal replacements or prepared foods from supermarkets, drug stores, and other retail outlets will continue to capture share of the meal/snacks market by stealing visits from restaurants, according to The NPD Group, a leading global information company. NPD’s recent foodservice forecast through 2022 indicates that instances of prepared food purchased at retailers for at-home consumption will increase by ten percent over the next decade compared to a four percent increase forecast for restaurant traffic. Source: https://www.npd.com/wps/portal/npd/us/news/press-releases/prepared-foods-from-retail-will-grow-twice-as-much-as-restaurant-visits-over-the-next-decade-reports-npd/

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Hy-Vee Reimagines Foodservice With Full-Service Restaurants Jul. 29, 2013 Liz Webber WEST DES MOINES, Iowa — Hy-Vee Food Stores is making good on a promise executives made earlier this year to shake-up its foodservice chain-wide. Over the next three years, the retailer will remodel 75 stores to add a full-service restaurant and bar concept called Market Grille. The remaining Hy-Vee locations will incorporate a Market Cafe, which features a more limited menu and fewer alcoholic beverage options. “We’ve had foodservice since the 1950s. And so we have a customer base that’s very well trained and very well acquainted with how we’ve always done foodservice,” Randy Edeker, Hy-Vee chairman, president and CEO, told SN in a recent interview… “We are a company focused on fresh and embarking on a new initiative with restaurants to continue building on this. The ‘Market’ represents the place you go for fresh ingredients and ‘Grille’ introduces the restaurant into the mix,” said [Brooke] Barnes [director of restaurant development]. FULL STORY & PICTURES: http://supermarketnews.com/deli-fresh-meals-spotlight/hy-vee-reimagines-foodservice-full-service-restaurants About Hy-Vee Market Grille: http://www.hy-veemarketgrille.com/about/ About Hy-Vee Market Café: http://www.hy-veemarketcafe.com/about/

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Ralphs pops cork on wine bar Dec 29, 2014 Elliot Zwiebach “What we try to do is offer a total experience for customers, no matter what the neighborhood is,” she told SN. “Adding a wine bar is not necessarily intended to generate sales — we simply want to do something different and determine if customers want it.” Read More: http://supermarketnews.com/beverage/ralphs-pops-cork-wine-bar#ixzz3NOn3dmfr Read More: http://supermarketnews.com/beverage/ralphs-pops-cork-wine-bar#ixzz3NOmnLder

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Photos courtesy of Fresh & Easy Elliot Zwiebach, Retail/Financial Reporter, Supermarket News December 4, 2014 Fresh & Easy is getting “smarter” with a new-look store that made its debut in Las Vegas in late November as part of an effort by the chain’s new owners to reinvigorate the brand. The stores, which feature totally new layouts and a new merchandise mix, are being touted in print, electronic and digital ads as a “smarter” store. Eight of the 19 Las Vegas stores have already been upgraded, with the balance due to be remodeled by early January, the company said. The 15,000-square-foot stores still utilize 10,000 square feet of selling space, but that space has been completely transformed, with lower shelving, more wood fixtures for a warmer look, more wall décor and a broader offering of healthy and natural foods, plus a wide selection of fresh offerings for in-store dining or takeout. Read More: http://supermarketnews.com/photo-gallery/gallery-smarter-fresh-easy-debuts-las-vegas#ixzz3M62G2YCz

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Coke/Walmart Goes Well With Client: Coca-Cola (in partnership with Walmart) Objective: Create a campaign speaking to Moms, highlighting EffortLess Meals as a solution to their busy family lives. Deliverables: A multimedia campaign, consisting of both television and radio Awards: -Gold Effie in Manufacturer: Single-Retailer Rollout Category -Bronze Effie in Manufacturer: Multi-Brand Shopper Solution Category -Silver Reggie in Retailer-Specific Program Category -Silver Reggie in Shopper Marketing Category SOURCE: http://cargocollective.com/samcrews/Coke-Walmart-Goes-Well-With COKE WM EFFORTLESS MEALS SHOPPER from Sam Crews Tuesday, January 28, 2014 4:56 PM VIDEO in HD: http://vimeo.com/85292184 Coke/Walmart Goes Well With from Sam Crews Wednesday, May 22, 2013 2:20 PM VIDEO in HD: http://vimeo.com/66754451

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Mega Foods, Eau Claire, Wis. This locally owned cooperative projects both a vintage and modern feel to a community-centric area By Carly Hagedon Posted April 26, 2013 What do you get when you combine nostalgia, modernity and groceries? After being stuck in a rundown building for the past several years, Mega Foods, the nation’s largest consumer-owned food co-op, was ready for some revamping. Harry Steen, Supervalu creative director, and his team heeded the call of renovation. FULL STORY: http://vmsd.com/content/mega-foods-eau-claire-wis

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Over the past five plus years private brand dollar share grew 1.5 share points from 16.2 to 17.7. Share growth was best in 2010 and 2011 as private brand dollar sales growth in both of those years was considerably greater than growth observed by brands. However, since 2012, private brand dollar growth was comparable or just slightly better than what brands experienced. As a result, share growth in many department and categories slowed as brands out-innovated and out-promoted private brands. Private Brands dollar sales in Total U.S. All Outlets Combined (xAOC): $95 billion 52 Weeks Ending 12/26/2009 $101 billion Calendar Year 2010 W/E 01/01/2011 $109 billion Calendar Year 2011 W/E 12/31/2011 $112 billion Calendar Year 2012 W/E 12/29/2012 $115 billion Calendar Year 2013 W/E 12/28/2013 $118 billion 52 Weeks Ending 12/27/2014 Branded dollar sales in Total U.S. All Outlets Combined (xAOC): $492 billion 52 Weeks Ending 12/26/2009 $501 billion Calendar Year 2010 W/E 01/01/2011 $518 billion Calendar Year 2011 W/E 12/31/2011 $532 billion Calendar Year 2012 W/E 12/29/2012 $540 billion Calendar Year 2013 W/E 12/28/2013 $547 billion 52 Weeks Ending 12/27/2014

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Fact: Store Brand $ Share of Total Store ($ IMPORTANCE) Here is the list of U.S. retailers with the largest overall store brands shares. There are a few smaller grocers who could have made this list, but we would have been splitting hairs and we wanted to show those who have larger scale either at a national, regional or market level. Because of their strong store brands position, we also decided to use the Hannaford banner and not a total Delhaize Corporate view. The average share for these retailers is 36% and you can see how each of them capture a greater store brands share than the level in the retail channel where they reside. The two limited assortment/deep discount formats (Aldi and Save-A-Lot) lead they way in driving high store brands shares, followed by Wegmans, H-E-B, and Kroger Corporate Grocery. Interesting to see Costco in the middle of the pack as well as Dollar General on the list of best of breed. So what is it about these ten retailers that make them best of breed? Is there some commonality in the successes for each on the list? PS Please note that Aldi & Costco do not provide their POS data for inclusion in retail measurement services. And, while H-E-B does provide POS data for brand sales in their stores, they do not share their store brands sales. As such, our view of retail performance via our Homescan panel is not totally precise as we will not have product definitions for all of their store brands items.

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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.

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Fueled by Recession, U.S. Wealth Gap Is Widest in Decades, Study Finds By PATRICIA COHEN DEC. 17, 2014 The wealthy are getting wealthier. As for everyone else, no such luck. A report released on Wednesday by the Pew Research Center found that the wealth gap between the country’s top 20 percent of earners and the rest of America had stretched to its widest point in at least three decades. Last year, the median net worth of upper-income families reached $639,400, nearly seven times as much of those in the middle, and nearly 70 times the level of those at the bottom of the income ladder. There has been growing attention to the issue of income inequality, particularly the plight of those earning the federal minimum wage of $7.25 an hour or close to it. But while income and wealth are related (the more you make, the more you can save and invest), the wealth gap zeros in on a different aspect of financial well-being: how much money and other assets you have accumulated over time, including the value of your home and car plus any investments in stocks, bonds and the like. Continue reading the main story Related Coverage Think of it as “a measure of the family ‘nest egg,’ ” as Pew calls it — a hoard that can sustain a household during an emergency, like the loss of a job, and in the long run can see someone through retirement. Note: Middle Income classifications: 1 person household with earning of at least $22k but less than $66k 4 person household with earnings of at least $44k but less than $132k FULL STORY: http://www.nytimes.com/2014/12/18/business/economy/us-wealth-gap-widest-in-at-least-30-years-pew-study-says.html?_r=0

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While consumers don’t always do as they say, there is a strong correlation between the attitudinal attachment consumers have for store brands and store brands share, and both fall as incomes rise. A greater percentage of lower income households strongly believe that store brands are a good alternative to name brands. 36% of those with incomes less than $20,000 strongly believe that store brands are a good alternative to name brands versus 25% for households with incomes of $100,000 or more. The lowest income group devotes 21.5% of their total consumer-packaged-goods dollar purchases to store brands, while store brands dollar share among the most affluent group is almost 5.8 percentage points lower (15.7%). [Source: Nielsen Homescan Survey, January/February 2014, n=43663]

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The lower store brands share among affluent consumers is actually due to the fact that more affluent households spend so much more on branded items. That is, store brands dollar buying rate increases across households as income rises and the store brands buying rate among those with incomes of $200,000 or more is greater than the rate among the lowest income group. However, the annual buying rate for branded items among those with incomes of $200,000 or more is much greater than the branded buying rate for households with incomes under $25,000. So retailers can obviously win with store brands among affluent households too and the pay-off can be rewarding. However, be careful that you don’t create store brands options at the expense of branded items of interest to your affluent shoppers and drive shoppers to a competitor. These findings do suggest opportunities for tiered store brands programs where shoppers can choose between value store brands, national brand equivalents, and premium store brands offerings.

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Store brands connect on quality and value and we see that the positive perception ratings outweigh the negatives. Note: 2015 survey fielded in January/February of 2015 (n=49627) Annual slide update: March 12, 2015

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And the positive perceptions span all income groups. Note: 2015 survey fielded in January/February of 2015 (n=49627) Annual slide update: March 12, 2015

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The negative perceptions span all income groups too, but the most affluent are far less comfortable with serving store brands to their guests. Note: 2015 survey fielded in January/February of 2015 (n=49627) Annual slide update: March 12, 2015

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We see similar levels of positive store brands perceptions across multicultural households. Looks like an opportunity to attract Asian and Hispanic households to buy more store brands with money back guarantees. Note: 2015 survey fielded in January/February of 2015 (n=49627) Annual slide update: March 12, 2015

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Asian households have the most negative store brand perceptions. But it looks like an opportunity to connect with African-Americans, Asians and Hispanics with education and greater assortment in stores where they shop. Note: 2015 survey fielded in January/February of 2015 (n=49627) Annual slide update: March 12, 2015

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Now let’s turn to growth opportunities in the areas of health & wellness. This tough economy took a toll on organics as consumers chose between higher-priced better-for-you products and those with better price or value that may not be as healthy. While leading a healthy life is on the minds of many, getting a better price was on the minds of more. In 2006, 2007 and into the 3rd quarter of 2008, organics’ 4-weekly growth rates were strong (averaging between 18% and 30% plus). After the September 15, 2008, financial crisis, growth rates for organics dropped dramatically. However, organic growth returned at the end of 2009 and continues.

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Focus on health is not a passing fad. Let’s take a look at how health & wellness is impacting what we can eat while attending games at our favorite American pastime, professional baseball games. 5 years ago food offerings would have been all about hot dogs, cotton candy, sausages, fries and cheese-covered nachos. This summer, the shift is clear. Now, stadiums are stepping up with healthy offerings. And here are just a few examples among many. • Chicago White Sox: Adobe mango chicken sausage • Anaheim Angels: Panini with zucchini, carrots, mushrooms, tomatoes, and pesto

sauce. Or try the vegan Chicago dog with onions, relish, and spicy mustard. • Chase Field, Phoenix: Black-bean burger with barbecue sauce on a whole-wheat

bun. • Philadelphia Phillies: Veggie cheesesteak (vegan beef) • Colorado Rockies: "Infield Greens" build-your-own salad - custom-ordered salad

from a wide variety of vegetables, plus tofu, shrimp, or chicken. But don’t get us wrong, America still loves its indulgences. Americans want the best of both – healthy options at their fingertips and indulgent options when they want to splurge. Want the proof – then back to our baseball example: • My beloved Cincinnati Reds: selling a 1-pound bacon sandwich and you can get it

free (along with a t-shirt commemorating your colossal achievement) if you eat four in one inning

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Wegmans cuts back on added sugars Jan 20, 2015 To help customers eat healthier, Wegmans Food Markets has been reducing the amount of added sugar in many of its private label products, the retailer said in a press release. “Our Wegmans Greek yogurt already had less sugar than regular flavored yogurts but we are now adding less sugar than before in the organic varieties and they still taste great,” Wegmans nutrition and product labeling manager Jane Andrews said in a statement. “We’re also reformulating some bottled sauces to have less added sugar. We’re updating Wegmans products across the store to cut added sugar where we can, while preserving the taste appeal customers expect.” Related Wegmans adds fresh gluten-free treats to bakery Wegmans sushi gets rid of gluten In the bakery, the Rochester, N.Y., chain offers smaller portion sizes, such as mini croissants, mini sweet rolls and mini cheesecakes, rather than decreasing the amount of sugar in recipes. CONNECT WITH SN ON FACEBOOK Like the Supermarket News page for updates throughout the day. “Changing a recipe for baked goods can be tricky. There’s a limit to how much you can cut down sugar without noticeably affecting taste and texture,” said Andrews. “So another route is to make serving sizes smaller.” The retailer also promotes its private label flavored waters and unsweetened bottled teas as healthy beverage options. Wegmans said it is working to educate customers about added sugars, including through its seasonal Wegmans Menu Magazine. Read More: http://supermarketnews.com/health-wellness/wegmans-cuts-back-added-sugars#ixzz3PPhctTBC

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This vending machine will deny you snacks based on medical records Spotted by Tara Kamin, written by Springwise on December 17, 2014 Businesses often stand by the motto 'the customer is always right' — but are they? We've already seen a few services that deny consumers what they want based on their personal info. For example, Billboard Brasil's Fan Check Machine only gave out copies of the music magazine if the buyer could prove they owned tracks by the artist on the cover. Now the Luce X2 Touch TV vending machine uses facial recognition and customers' medical records to determine if they should be allowed to buy an unhealthy snack. Created by Italy-based Rhea Vendors and recently launched in the UK, the machine features a 22-inch touchscreen display that lets customers to select an item just like a standard vending machine. However, before the snack is released customers with an account can go through a facial recognition check. The technology detects the customer's age, build and mood in order to determine whether the purchase is a wise decision. The machine can also be programmed to access information about the user's medical records and purchase history. If the algorithms decide that purchasing a coffee with 3 sugars or the fourth candy bar of the day is a bad idea for their health or mood, it can refuse to vend the product. While some customers won't appreciate their private data being analyzed or getting rejected by a lifeless machine, the idea could be a savior for those on a diet. Locations such as gyms could also integrate their memberships with the system to deny snacks to those who don't visit often enough. Will this kind of automatic personalization become a standard for smart vending machines in the future? FULL STORY: http://www.springwise.com/vending-machine-deny-snacks-based-medical-records/

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We should care about health & wellness because many wellness claims are outpacing retail growth by a significant number, at a time when growth has stalled in many departments and categories. Nielsen Wellness Track was created to measure the volumetric impact of wellness claims. Organic products were driving very strong growth prior to the recession and then suffered some short-term losses. However, organic wellness claims have been growing consistently year-over-year with a four-year compounded unit growth rate (CAGR) of 10.8%. The top five fastest growing claims* are experiencing unit sales growth at an average rate of 13% in the latest year, while the total store has unit sales being flat. I can’t think of a better way to demonstrate the opportunity around health & wellness in our industry. By the way, we have expanded our coding of wellness claims and we launched Nielsen Wellness Track to provide better insights to steer clients in a healthy direction. Nielsen Wellness Track characteristics are based off of information (including claims, endorsements, brand name) found on all sides of the packaging. Nutrition facts are not used. As for the “natural” claim, Nielsen went beyond information found on the package label and researched to determine if a brand was truly natural. If we found there were claims or strategic ingredients that indicated something not natural was in the product, but had “natural” on the package, we omitted it from our “natural” claim. Notes for 52: • Total Store: unit %-change 52 W/E 12/27/2014 verses year ago is -0.1% • Organic: CAGR (compounded annual unit growth rate) over four years 52 W/E 1/1/2011 versus 52

W/E 12/27/2014 is 10.8% (rounds to 11%) • Top 5 Fastest Growing Healthy Label Claims* during 52 W/E 12/27/2014: based on largest unit %-

change vs. year ago, and those top 5 were averaged out to 13.2% (rounds to 13%) *Top 5 Fastest Growing Healthy Label Claims: 1. Low Glycemic 2. GMO Free 3. Gluten Free 4. Organic 5. Natural

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And we see diverse category demand across the NMI health & wellness segments – particularly at the extremes. In terms of annual category spending across the segments, we see the segments behaving as they are named. That is, the EAT, DRINK & BE MERRYS show above average spending per household on beer, carbonated beverages and tobacco & accessories. On the other end of the health & wellness spectrum, the WELL BEINGS show above average category spending on wine, bottled water, fresh produce, and vitamins. How can your category or brand be used by retailers to meet shopper demand? Market: Total U.S. Product: All Modules Facts: $ Buying Rate Index calculation: annual dollars per household spent on category within an individual segment divided by the annual buying rate for all households times 100 Period: 12/29/13 - 12/27/14 Slide update: 1/31/2015

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Digital Shopping and digital retailing are here to stay and pace of change is incredible and some, but not all consumers are shifting their search from print to digital too.

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So what does this mean for retailers? For one, our research indicates that there may be an opportunity for retailers to expand to more marketing touchpoints (and digital touchpoints specifically) to reach shoppers. According to our shopper survey, which focused on 11 key marketing touchpoints (8-digital, 3-print), when looking across all shopper respondents, almost half of shoppers use between 4-7 touchpoints. However, when looking at Millennials specifically, most use at least 8 touchpoints…We can conclude that most millennials are using multiple digital touchpoints to research products and prices! Based on these shopper behaviors, it is clear that retailers need to embrace the idea of touchpoint expansion, and specifically digital touchpoint expansion, in order to compete for share of voice moving forward. Source: Nielsen Touchpoints Shopper Survey, 4/2014 Q1 – How often, if ever, do you look at information about products and sales available at stores from each of the following sources?

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Now that Amazon’s drone plans have been shot down by the FAA, rumors are flying that Amazon has filed a patent to deliver packages via Star Trek-like transporter. Rumors are also flying around about how Amazon has

lured away William Shatner and Kaley Cuoco of CBS' "The Big Bang Theory” from Priceline.com!

Amazon Prime Air We're excited to share Prime Air — something the team has been working on in our next generation R&D lab. The goal of this new delivery system is to get packages into customers' hands in 30 minutes or less using unmanned aerial vehicles. Putting Prime Air into commercial use will take some number of years as we advance the technology and wait for the necessary FAA rules and regulations. Check out this footage from a recent test flight. Frequently Asked Questions Q: Is this science fiction or is this real? A: It looks like science fiction, but it's real. From a technology point of view, we'll be ready to enter commercial operations as soon as the necessary regulations are in place. The Federal Aviation Administration (FAA) is actively working on rules for unmanned aerial vehicles. Q: One day we'll see a fleet of Prime Air vehicles in the sky? A: Yes. One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today. Q: When will I be able to choose Prime Air as a delivery option? A: We hope the FAA's rules will be in place as early as sometime in 2015. We will be ready at that time. Q: How are you going to ensure public safety? A: The FAA is actively working on rules and an approach for unmanned aerial vehicles that will prioritize public safety. Safety will be our top priority, and our vehicles will be built with multiple redundancies and designed to commercial aviation standards. WEBSITE: http://www.amazon.com/b?node=8037720011

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By Geoffrey A. Fowler Jan. 9, 2015 11:50 a.m. ET Taste Testing 3-D Printed Food We sample a trio of machine-crafted confections—CocoJet dark chocolate, ChefJet tart blackberry candy and XYZ Printing butter cookies THE 3-D PRINTERS used to create everything from industrial prototypes to jewelry are coming to the culinary world. In collaboration with chefs and companies like Hershey’s and Barilla, makers of 3-D printers are experimenting with chocolate, cookie dough, sugar and other ingredients that can be loaded into a printer. Read More: http://www.wsj.com/articles/taste-testing-3-d-printed-food-1420822231

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New York City’s Grocery Delivery Wars: Who’s the Winner? Weighing the Many Novel Options for Getting Groceries Wall Street Journal By Anne Kadet Updated Feb. 6, 2015 4:33 p.m. ET As any old codger can attest, food delivery in New York has been around forever. Not so long ago, every corner grocery delivered; many still do. And while online ordering still feels new, FreshDirect, based in Long Island City, has been delivering broccoli and Cheerios via the interwebs since 2002. But suddenly the field is crowded with novel options. The new contenders: AmazonFresh, which aims to do for bananas what it did for books—is this a good thing?—and Instacart, which introduces a new model to the grocery-delivery racket. I was curious how these services might compare to my Key Food in Carroll Gardens, a corner market featuring a delightfully compact layout, cheerful employees and low prices. So I ordered—to the extent possible—the exact same basket of groceries from each. Amazon’s new service, no surprise, manages to be completely terrifying in its omnipotence. The AmazonFresh inventory includes more than 500,000 items. If you want to include a lawn-mower blade or a used copy of “The Fountainhead” with your grocery delivery, you can do that. FULL STORY: http://www.wsj.com/articles/new-york-citys-grocery-delivery-wars-whos-the-winner-1423250707?KEYWORDS=instacart

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Walmart's Drive-Through Grocery Concept Is A Head Scratcher 10/02/2014 @ 9:31AM George Anderson, Contributor Earlier this week, Walmart debuted its Walmart Pickup – Grocery service to registered customers in its hometown of Bentonville, AR. Plans to build and test the concept were announced earlier this year by former Walmart U.S. CEO Bill Simon. The test concept, which is a free service, allows customers to place their orders online any time from two hours to three weeks in advance. Customers drive to the Walmart Pickup – Grocery warehouse and use a kiosk to notify attendants that they are ready to pick up their orders. Walmart associates bring orders out to customers’ cars. In total, shoppers have about 10,000 items to choose from, including dairy, meat and produce as well as HBC and household items. FULL STORY: http://www.forbes.com/sites/retailwire/2014/10/02/walmarts-drive-through-grocery-concept-is-a-head-scratcher/ PHOTOS: http://news.walmart.com/photos/walmart-pickup-grocery

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Ordering | January 2015 | By Kevin Hardy Order’s Up Limited-service pizza brands amp up online ordering innovation to stay competitive. More than two decades ago, Pizza Hut sold its first pizza online—reportedly the first thing ever sold on the Internet. Ever since, the nation’s pizza chains have been leading the way in online sales innovation. And this year, that innovation is expected to continue as pizza brands fight off a stiff competitive field. In the last two years, the industry saw new online ordering tools from some of the biggest quick-serve pizza players. For example, in 2013, Pizza Hut’s online sales surpassed the $1 billion mark, helped in part by the brand’s game-changing Xbox 360 ordering app, which reportedly generated more than $1 million in sales in its first four months. And in October, competitor Domino’s Pizza, another leader in online ordering, debuted its voice-ordering system, allowing customers to order on the mobile app using their voice rather than their fingers. The voice-activated system is named Dom and works like Apple’s Siri. Read more: http://www.qsrmagazine.com/ordering/order-s?utm_campaign=20150120&utm_medium=email&utm_source=jolt&microsite=576 Read more: http://www.psfk.com/2014/10/dom-siri-like-dominos-delivery-app.html

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KSDK.com video clip & story: http://www.ksdk.com/story/life/2014/01/03/fields-foods-grocery-lafayette-square-soulard/4310387/ Photography: http://www.feaststl.com/the-feed/article_e3a1ad90-73ed-11e3-a2fc-0019bb30f31a.html Fields Foods website: http://www.FieldsFoods.com Fields Foods Facebook page: https://www.facebook.com/FieldsFoods January 4th Grand Opening of Fields Foods Brings Fresh, Locally-Produced Food to St. Louis; Ribbon Cutting Event With Mayor Slay for New Full-Service Grocery Store to Be Held January 3rd from 4-8pm ST. LOUIS, MO--(Marketwired - Jan 2, 2014) - Fields Foods®, a locally owned and operated grocery store specializing in locally-produced food products and trusted brands, will open its doors to the public on January 4th at 1500 Lafayette Avenue near the south side of St. Louis. The highly anticipated store is dedicated to bringing fresh, high-quality foods to residents of St. Louis -- which has several urban food desert areas where healthy, nutritious food options have long been limited. News Release: http://www.marketwired.com/press-release/January-4th-Grand-Opening-Fields-Foods-Brings-Fresh-Locally-Produced-Food-St-Louis-1865901.htm

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Let’s now talk about the importance of winning the occasion and in this example we are talking about meal occasions.

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Data from NPD illustrates how Millennials are eating less at-home meal occasions than other generations. This is particularly true for breakfast and dinner meals, where at-home meal frequency is highest. Given the size of this group, this is likely another reason behind why consumer packaged goods sales of food and beverages are relatively soft.

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When it comes to dinner preparation, Millennials make fewer meals from scratch (50% response rate among Millennials versus 63% and 64% for Gen X and Boomers. Millennials spend less time preparing meals and are more likely to say they enjoy cooking! So does less meal prep time lead to happier cooks???? Note: In the M box, which stands for Millennials, anything with an X beside it is statistically different than the X table, which is Generation X. Anything with a B is statistically different than the B table, which are your Boomers.

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Meats for the sweet? Wegman’s store puts own unique sizzle to Valentine’s Day promo February 13, 2015 | By Rob Eder There’s a reason why shoppers love Wegman’s. A Valentine’s Day promotion spotted Friday, in a Buffalo-area store, featuring twin ribeye steaks, packaged ready-for-the-flame in a disposable, heart-shaped broiler pan is one small example as to why. Wegman’s was voted the most popular company in America last week, finishing first among 100 other companies in the 16th annual Harris Poll Reputation Quotient Study — ahead of Apple, Google and Amazon — even though it operates just 85 stores in just a handful of states. “To be recognized in this way is just incredible,” noted Wegman’s CEO Danny Wegman. “It always starts with our people, who thrill our customers every day and extend a family feeling in our stores across six states.” No doubt this Valentine’s Day promo really gets the juices flowing.

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So as we started our changes: How can we drive growth in dynamic or challenging times? 1. Stay connected with winning retailers & categories 2. Determine your role in digital retailing & digital shopping & act 3. Win the trip through precision marketing & sales focused against shoppers that matter 4. Drive the health & wellness growth wave 5. Win the occasion – whether by meal occasion, seasonal period, or personal/home cleaning occasion

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