The Irish & UK Grocery Retail Landscape
David Berry – Commercial Director, Kantar Worldpanel
© Kantar Worldpanel The Agenda
> – Global Context – GB & ROI Market Health – ROI Key Trends – GB Key Trends – ROI Retailer Evaluation – GB Retailer Evaluation
© Kantar Worldpanel While the domestic economy continues to struggle global GDP grows consistently
Global GDP growth 6
5
4
3
2
1
0
-1
2011
1984 1985 1992 1993 2000 2001 2008 2009 2016 2017 1980 1981 1982 1983 1986 1987 1988 1989 1990 1991 1994 1995 1996 1997 1998 1999 2002 2003 2004 2005 2006 2007 2010 2012 2013 2014 2015
© Kantar Worldpanel World Population 1950 - 2050
9 billion 8 billion 7 billion 6 billion 5 billion 4 billion 3 billion
Source: UN World Population Prospects
© Kantar Worldpanel FAO Food Price Index
© Kantar Worldpanel The Agenda
– Global Context > – ROI & GB Market Health – ROI Key Trends – GB Key Trends – ROI Retailer Evaluation – GB Retailer Evaluation
© Kantar Worldpanel Cash strapped, cautious although (slightly) less fearful
UK Consumer Confidence Index 0
-5
-10
-15
-20
-25
-30
-35
Nationwide (Up to May 2012)/ESRI (Up to Sep 2012) Consumer Confidence Index
Source: Kantar Worldpanel & Nationwide Consumer Confidence © Kantar Worldpanel 3% market growth in GB adds £3bn, Irish market remains flat
WE & USA Q3 2012 FMCG Sales Performance 5 3 3 2 2 1 1 0 0 0
-2 -4
© Kantar Worldpanel How do the two grocery markets compare?
– Market Size – €9b – £100b
– Grocery Spend per HH – €5,400 – £3,800
– Market Growth – 0% – +3%
– Price Inflation – 5% – +4.5%
© Kantar Worldpanel The Agenda
– Global Context – ROI & GB Market Health > – ROI Key Trends – GB Key Trends – ROI Retailer Evaluation – GB Retailer Evaluation
© Kantar Worldpanel Despite increasing inflation shoppers continue to restrict their spend
15% 8.0% 10%
5.0% 5% 5.3%
0% 0.3%
-5%
-10% Inflation HH Spend change
-15%
912 801 803 805 807 809 811 813 902 904 906 908 910
1001 1211 1213 1005 1007 1009 1011 1013 1102 1104 1106 1108 1110 1112 1201 1203 1205 1207 1209 2008 2009 1003 2010 2011 2012
Source: Kantar Worldpanel Ireland (ROI )
Grocery inflation across 38,000 items © Kantar Worldpanel So how are shoppers coping?
Buy less Store choice Trade Down
-1% -1% -3%
© Kantar Worldpanel 47% 2012
46% 2011
44% 2010
© Kantar Worldpanel The Agenda
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© Kantar Worldpanel Grocery Market Growth v. Inflation Now trailing inflation again Phase 1 Phase 2 Phase 3 10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
13 Jul 08 12 Jul 09 11 Jul 10 10 Jul 11 08 Jul 12
05 08 Oct 19 09 Apr 04 09 Oct 18 10 Apr 03 10 Oct 31 10 Oct 02 11 Oct 30 11 Oct 15 12 Apr 28 12 Oct 17 11 Apr
25 Jan 25 09 Jan 14 09 Jun 24 10 Jan 13 10 Jun 23 11 Jan 12 11 Jun 22 12 Jan 10 12 Jun
22 09Mar 21 10Mar 20 11Mar 18 12Mar
22 09Feb 21 10Feb 20 11Feb 19 12Feb
02 Nov 08 30 Nov 08 28 Dec 08 01 Nov 09 29 Nov 09 27 Dec 09 28 Nov 10 27 Nov 11 25 Dec 11 25 Nov 12 23 Dec 13 26 Dec 10
10 Aug 08 07 Sep 08 09 Aug 09 06 Sep 09 08 Aug 10 07 Aug 11 04 Sep 11 05 Aug 12 02 Sep 12 30 Sep 12 05 Sep 10
1709 May 1511 May 1312 May 16 10 May
12 we growth (Grocers RST) 12 we inflation
© Kantar Worldpanel So how are shoppers coping?
Buy less Store choice Trade Down
+1% NC -2%
© Kantar Worldpanel © Kantar Worldpanel Cross category sales performance Every category within grocery is showing sales growth
GB Grocery Category Sales Change (%)
8.9 8.4 8.2 8.1 7.3 6.8 6.2 6.1 5.6 5.6 5.4 5.3 4.7 4.6 4.5 3.8 3.6 3.4 2.8 2.8 2.6 2.4 2.2 2.2 1.2
© Kantar Worldpanel Cross category sales growth The Fresh Food categories have added the most in absolute sales GB Grocery Category Absolute Sales Growth - £m 542
287 283 215 184 143 141 139 122 114 111 107 91 90 86 85 59 45 38 24 23 21 21 19 16
© Kantar Worldpanel Multi-channel shopping is a growing dynamic in GB
© Kantar Worldpanel © Kantar Worldpanel The Agenda
– Global Context – ROI & GB Market Health – ROI Key Trends – GB Key Trends > – ROI Retailer Evaluation – GB Retailer Evaluation
© Kantar Worldpanel Dunnes returned to growth for the Christmas period
Tesco 27.8 0.4
Dunnes 24.3 1.9
SuperValu 19.5 -1.2
Aldi 6.0 30.0
Lidl 5.9 1.8
Superquinn 5.1 -4.6
% share of Grocery spend (€) % change 12 w/e 2012 v 2011
23 © Kantar Worldpanel Objectives:
Maintain growth ahead of the market Leave no reason to shop elsewhere Drive value credentials Build shopper empathy
How will this be achieved:
Push multi-channel, especially in Dublin Use key events to drive excitement in store Drive value to counter Discounter threat Improve quality & image of fresh through Homegrown
24 © Kantar Worldpanel Objectives:
Sustain momentum Excellent in store execution Use ValueClub around key events Compete on value
How will this be achieved:
Targeted use of ValueClub Use the big brands our shoppers love Clarity & strength of promotional offers
© Kantar Worldpanel Objectives:
Retain loyal shoppers Win back lapsed shoppers Build direct link to shoppers & their community Grow through offering new ranges & services
How will this be achieved:
Providing clear value for money Own Brand focus Leadership in Fresh Food Innovation in store & through IT
26 © Kantar Worldpanel Objectives:
Continue to improve sales performance Reinvigorate traditional strengths Re-engage with the consumer
How will this be achieved:
Build relationships with shoppers Relaunch the savings card Refresh in store environment Leverage traditional strengths – Fresh & Leinster
27 © Kantar Worldpanel The Agenda
– Global Context – ROI & GB Market Health – ROI Key Trends – GB Key Trends – ROI Retailer Evaluation > – GB Retailer Evaluation
© Kantar Worldpanel Long-Term Share of Till Roll Grocers
34 32 30 28 26 24 22 20 18 16 14
12 Share (Expenditure)Share 10 8 6 4 2
0
1993 1994 1995 1997 1998 1999 2001 2002 2003 2005 2006 2007 2009 2010 2011 2013 1996 2000 2004 2008 2012 Tesco Asda Sainsbury's Morrisons Total
© Kantar Worldpanel © Kantar Worldpanel
Grocery Share at Round Pound Prices £1/2/3/4 - £%
Iceland 57 Farm Foods 45 Asda 33 Morrisons 26 Tesco 22 The Co-operative 19 Sainsbury's 17 Independents 13 M & S 13 Waitrose 8 Lidl 5 Aldi 3
12 w/e Dec 23 2012
© Kantar Worldpanel
Balance Value
Values
Morrisons Share Change - 12 week share year-on-year change
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.6
08-Jul-12 10-Jul-11
02-Oct-11 30-Oct-11 15-Apr-12 17-Apr-11 28-Oct-12
12-Jun-11 10-Jun-12 22-Jan-12
20-Feb-11 20-Mar-11 19-Feb-12 18-Mar-12
27-Nov-11 25-Dec-11 25-Nov-12 23-Dec-12
07-Aug-11 04-Sep-11 02-Sep-12 30-Sep-12 05-Aug-12
15-May-11 13-May-12
© Kantar Worldpanel
5 key points…
– 1) Positive long term global food possibilities
– 2) Consumers remain cautious in ROI & GB
– 3) GB marketplace more positive
– 4) Fresh Food a major GB growth area
– 5) Know your retailer & find a fit
© Kantar Worldpanel