Retail Market Review – the Perfect Storm Edward Garner - Communications Director Aldi Lidl

Retail Market Review – The Perfect Storm Edward Garner - Communications Director Aldi Lidl

Everyone else

Waitrose M&S

Coping with the Perfect Storm Edward Garner - Communications Director The Agenda

– Market Background >– Squeeze & Effect – Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback – Frozen Insights

Global Food Price Indices

300

250

200

150

100

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Food Price Index Cereals Price Index Food Price Index, UN FAO Grocery Market Growth v. Inflation

-1%

-2%

-3% 24/Jul/11 21/Jul/13 19/Jul/15 17/Oct/10 14/Oct/12 12/Oct/14 03/Apr/11 29/Apr/12 27/Apr/14 24/Apr/16 10/Jan/10 27/Jun/10 08/Jan/12 24/Jun/12 05/Jan/14 22/Jun/14 03/Jan/16 19/Jun/16 07/Mar/10 04/Mar/12 31/Mar/13 02/Mar/14 29/Mar/15 06/Feb/11 03/Feb/13 01/Feb/15 28/Feb/16 15/Nov/09 12/Dec/10 13/Nov/11 09/Dec/12 10/Nov/13 07/Dec/14 08/Nov/15 20/Sep/09 22/Aug/10 18/Sep/11 19/Aug/12 15/Sep/13 17/Aug/14 13/Sep/15 14/Aug/16 02/May/10 29/May/11 26/May/13 24/May/15

12 we growth (Grocers RST) 12 we inflation Food and Drink as a Proportion of UK Household Expenditure %

0 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: ONS Series ABQI / ABZV Food and Drink as a Proportion of UK Household Expenditure %

25 Housing & Utilities

Source: ONS Series ABQI / ABZV Latest 12-wk % Change Total Grocery Budget Own Label Trends - 4-weekly £m

140

120

100

0 22-Jul-12 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 14-Oct-12 13-Oct-13 12-Oct-14 11-Oct-15 28-Apr-13 27-Apr-14 26-Apr-15 24-Apr-16 24-Jun-12 06-Jan-13 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 03-Mar-13 31-Mar-13 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 03-Feb-13 02-Feb-14 01-Feb-15 28-Feb-16 11-Nov-12 09-Dec-12 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 19-Aug-12 16-Sep-12 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 27-May-12 26-May-13 25-May-14 24-May-15 22-May-16

Tesco Asda Sainsbury's Morrisons +26% -29% -21% -11% The Agenda

– Market Background – Squeeze & Effect >– Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback – Frozen Insights

Annual Till Roll Totals Expenditure Trends

Lidl 16

Aldi 13

Co-op 2

Waitrose 1

Total Grocers 0

Sainsbury's 0

Iceland 0

Tesco -1

Morrisons -2

Independents -3

Asda -4

52 w/e Aug 14 2016 y/y % Change Long-Term Share of Till Roll Grocers

3 Share (Expenditure) Share

0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 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 1994 1999 2001 2006 2008 2013 2015 1993 1995 1996 1997 1998 2000 2002 2003 2004 2005 2007 2009 2010 2011 2012 2014 2016

Tesco Asda Sainsbury's Morrisons Total Aldi + Lidl Latest Period Till Roll Totals - Share of Total Grocers

Tesco 30.9 28.1

Sainsbury's 16.4 16.1

Asda 17.5 15.7

Morrisons 11.5 10.6

Co-op 6.8 6.6

Aldi 3.0 6.2 Waitrose +5.4% 4.6 5.1 Lidl +£6.9bn 2.8 4.5 Iceland 2.0 2.1

Independents 2.2 2.0

Farmfoods 0.6 0.6

12 w/e 19 Aug 12 12 w/e 14 Aug 16 Latest Period Till Roll Totals - Share of Total Grocers

Tesco 30.9 28.1

Sainsbury's 16.4 16.1

Asda 17.5 15.7

Morrisons 11.5 10.6

Co-op 6.8 6.6

Aldi 3.0 6.2

Waitrose 4.6 5.1

Lidl 2.8 4.5

Iceland 2.0 2.1

Independents 2.2 2.0

Farmfoods 0.6 0.6

12 w/e 19 Aug 12 12 w/e 14 Aug 16 Till-Roll Trends - Annual £% Change - Rolling 52wk periods

-1

-2

-3

-4

-5 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 25-May-14 24-May-15 22-May-16 Sainsbury's Tesco Asda Morrisons Annual Till Roll Totals Expenditure Changes £m

Aldi 759

Lidl 668

Co-op 155

Waitrose 83

Sainsbury's 29

52 w/e Aug 14 2016 y/y £m Change The Agenda

– Market Background – Squeeze & Effect >– Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback – Frozen Insights

Rushden, Northants - November 2015

SOCIAL CLASS PROFILES - 12 W/E JUL 17 2016 - £%

5 9 9 10 11 9 10 11 12 Class E 7 17 21 18 10 12 28 14 14 15 15 15 15 18 Class D 17 15 19 23 22 16 22 23 25 25 25 28 22 25 Class C2 31 28 19 24 27 26 26 25 Class C1 25 26 24 25 19 46 20 20 Class AB 34 32 28 26 26 26 22 22 20 19 13 12 Lidl Aldi Asda M & S Tesco Co-op Iceland Waitrose Morrisons Farmfoods Sainsbury's Total Grocers Independents Trended Aldi Loyalty Breakdown Sales % Shoppers %

36.1 33.5 44.1 40.7 49.6

76.5 81.7 78.8 87.2 84.5

38.9 39.2 37.9 37.6 36.5

27.6 16.1 24.7 13.5 15.3 18.3 21.4 11.9 13.9 10.3 7.5 2.5 3.7 4.7 5.9 19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 12 13 14 15 16 52 w/e periods12 13 14 15 16

High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%) Trended Tesco Loyalty Breakdown Sales % Shoppers %

9.3 9.2 9.7 10.1 10.4

24.8 25.1 25.9 25.5 25.1 43.7 44.1 45.5 46.7 47.5

25.3 25.1 25.1 24.5 24.2 65.8 65.7 64.5 64.4 64.5

31.0 30.9 29.4 28.8 28.3

19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 12 13 14 15 16 52 w/e periods12 13 14 15 16

High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%) Trading Indices - Aldi 52 w/e Aug 14 2016

Frozen Poultry+Game 186 Fruit+Veg+Salads 147 Frozen Fish 140 Fresh Meat 132 Fresh Poultry+Game 132 Packet Breakfast 111 Biscuits 107 Ambient Bakery Products 106 Canned Goods 105 Sweet Home Cooking 102 Dairy Products 100 Frozen Confectionery 100 Trading Indices - Lidl 52 w/e Aug 14 2016

Frozen Poultry+Game 166 Fresh Meat 153 Fresh Fish 150 Fruit+Veg+Salads 147 Fresh Poultry+Game 145 Sweet Home Cooking 127 Frozen Confectionery 123 Frozen Fish 117 Canned Goods 112 Packet Breakfast 108 Biscuits 106 Pickle+Tbl Sce+Condiment 104 Year-on-Year Expenditure Trends - % change Aldi

Fresh+Chilled 19.8

TOTAL GROCERIES 14.8

Toiletries 14.7

Household 14.5

Ambient Groceries 11.5

Frozen 9.6 52 w/e 14 Aug 16 Alcohol 6.3 Year-on-Year Expenditure Trends - & change Lidl

Fresh+Chilled 20.5

TOTAL GROCERIES 15.6

Frozen 13.6

Household 13.6

Toiletries 13.3

Ambient Groceries 12.2 52 w/e 14 Aug 16 Alcohol 5.2 Fresh & Chilled Trading Indices 120

115

110

105.8 104.4 105 103.5 103.9 102.4 100 100.9

95 52 w/e 17 Aug 14 52 w/e 16 Aug 15 52 w/e 14 Aug 16 Fresh & Chilled Trading Indices 120

115

110

105.8 104.4 105 103.5 103.9 102.4 100 100.9

95 52 w/e 17 Aug 14 52 w/e 16 Aug 15 52 w/e 14 Aug 16 The Agenda – Market Background – Squeeze & Effect – Towards the Mainstream? >– Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback – Frozen Insights

Aldi share amongst Asda/Aldi Shoppers - £% 40 38 36 34 32 30 28 26 24 22 20 18 16 14 The Agenda

– Market Background – Squeeze & Effect – Towards the Mainstream? – Invading the Repertoire >– EDLP – and meaning it – The Response – The Fightback – Frozen Insights

ON PROMOTION - £% 50 Big 4 45 40 35 30 25 20 15 10 5 0

The Agenda

– Market Background – Squeeze & Effect – Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it >– The Response – The Fightback – Frozen Insights

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Tesco - 12 w/e

-2%

-4%

-6% Contribution to growth %pts growth to Contribution

-8%

-10%

Full price Price reduction Multibuy Y for £X Market growth

Grocery (RST) 12w/e Tesco Share Change - 12 week share year-on-year change

0.0

-0.2

-0.4

-0.6

-0.8

-1.0

-1.2

-1.4

-1.6 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 28-Apr-13 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 31-Mar-13 30-Mar-14 29-Mar-15 27-Mar-16 02-Mar-14 01-Mar-15 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 26-May-13 25-May-14 24-May-15 22-May-16

Grocery Share at Round Pound Prices - £% - Asda

£1 12 £2

10 £3 £4 8

0 22-Jul-12 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 01-Apr-12 29-Apr-12 14-Oct-12 28-Apr-13 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 08-Jan-12 24-Jun-12 06-Jan-13 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 04-Mar-12 03-Mar-13 31-Mar-13 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 05-Feb-12 03-Feb-13 02-Feb-14 01-Feb-15 28-Feb-16 11-Dec-11 11-Nov-12 09-Dec-12 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 19-Aug-12 16-Sep-12 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 27-May-12 26-May-13 25-May-14 24-May-15 22-May-16

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Asda - 12 w/e

0% ?

-2%

-4%

-6% Contribution to growth %pts growth to Contribution

-8%

-10%

Full price Price reduction Multibuy Y for £X Market growth

Grocery (RST) 12w/e Asda Year-on-Year Trends - Till Roll £%

-2

-4

-6

-8 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 28-Apr-13 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 23-Jun-13 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 05-Jan-14 31-Mar-13 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 26-May-13 25-May-14 24-May-15 22-May-16 12 w/e Periods Reasons for Store Choice - It always has low prices

Asda 159

Co-operative 98

Morrisons 79

Tesco 76

Sainsbury's 66

M & S 60

Waitrose 29

LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015 Reasons for Store Choice - It always has low prices

Aldi 222

Asda 159

Lidl 146

Co-operative 98

Morrisons 79

Tesco 76

Sainsbury's 66

M & S 60

Waitrose 29

LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015

We've ended Brand Match to bring lower regular prices

Brand Match ended on 26 April 2016

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Sainsbury's - 12 w/e

15%

10%

-5%

-10% Contribution to growth %pts growth to Contribution

-15%

-20%

Full price Price reduction Multibuy Y for £X Market growth Sainsbury Share Change - 12 week share year-on-year change

0.6

0.4

0.2

0.0

-0.2

-0.4

-0.6

-0.8 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 28-Apr-13 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 03-Mar-13 31-Mar-13 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 26-May-13 25-May-14 24-May-15 22-May-16

Frosty morning? Don’t worry, we’ve found a use for that Morrisons card…

The Agenda

– Market Background – Squeeze & Effect – Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback >– Frozen Insights

Aldi Year -on-Year Trends - Till Roll £%

0 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 28-Apr-13 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 23-Jun-13 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 31-Mar-13 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 26-May-13 25-May-14 24-May-15 22-May-16 12 w/e Periods Lidl Year -on-Year Trends - Till Roll £%

Long-Term Share of Till Roll Grocers

3 Share (Expenditure) Share

0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Reasons for Store Choice - Waitrose

It has friendly staff 285

I like the cafe / restaurant 255

I like the own-label goods 185 less queuing than other stores 185

It has a good product range 158

It has a butcher's counter 137

It has a delicatessen 132

It has a fresh fish counter 129

It has an in-store bakery 95

It's near to my home 93

I like the store's layout 89

It sells clothing CDs etc. 65

It has good value for money 63

It always has low prices 29

LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015 M&S Share of Fresh & Chilled Groceries

8 Share (Expenditure) Share 7

4 20-Jul-14 19-Jul-15 17-Jul-16 13-Oct-13 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 24-Apr-16 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 25-May-14 24-May-15 22-May-16 M&S Year-on-Year Growth Trends - RST £%

0 21-Jul-13 20-Jul-14 19-Jul-15 17-Jul-16 13-Oct-13 12-Oct-14 11-Oct-15 27-Apr-14 26-Apr-15 24-Apr-16 05-Jan-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 22-Jun-14 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 18-Aug-13 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 25-May-14 24-May-15 22-May-16

12 w/e Periods RST Trends - Annual £% Change - Rolling 52wk periods

-1

-2

-3

-4

-5 20-Jul-14 19-Jul-15 17-Jul-16 27-Apr-14 12-Oct-14 26-Apr-15 11-Oct-15 13-Oct-13 24-Apr-16 05-Jan-14 22-Jun-14 04-Jan-15 21-Jun-15 03-Jan-16 31-Jan-16 19-Jun-16 02-Mar-14 30-Mar-14 01-Mar-15 29-Mar-15 27-Mar-16 02-Feb-14 01-Feb-15 28-Feb-16 10-Nov-13 08-Dec-13 09-Nov-14 07-Dec-14 08-Nov-15 06-Dec-15 15-Sep-13 17-Aug-14 14-Sep-14 16-Aug-15 13-Sep-15 14-Aug-16 25-May-14 22-May-16 24-May-15 Sainsbury's Tesco Asda Morrisons M&S Fresh & Chilled “FOR TONIGHT” – SHOPPER MISSIONS % WITHIN OUTLET For Tonight - Share of Occasions % 52 w/e 02 Feb 14 52 w/e 01 Feb 15 52 w/e 31 Jan 16 All Outlets 15 14 14

M & S 42 42 41 Sainsbury's Local 21 20 21 Budgens 20 18 16 The Co-operative 20 19 19 Tesco Express 19 16 18 Tesco Metro 18 17 18 Independents 17 18 17 Asda 11 11 11 Aldi 9 10 10 Trended Loyalty Breakdown Waitrose £% M&S £%

20.4 19.2 20.3 21.1 20.5

38.2 42.6 42.1 40.3 39.6

25.4 25.3 26.1 27.8 29.1

40.1 41.9 40.1 40.9 41.1

55.5 54.3 53.6 51.2 50.4

17.3 17.1 18.6 20.2 19.8

19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 12 13 14 15 16 52 w/e periods 12 13 14 15 16

High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%) Total Groceries - Net Switching Volumes - M & S

Tesco 32

Asda 24

Sainsbury's 22

Co-op 20

Morrisons 17

Independents 4

Waitrose 3

All Others 2

Farmfoods 0

M & S -

Iceland -3

Ocado -3

Aldi -4

Lidl -7

Switching - £m 52 w/e Jul 19 2015 vs. 52 w/e Jul 17 2016 Total Groceries - Total Net Switching Volumes - Summary

Aldi 542

Lidl 430

Ocado 127

M & S 107

Waitrose 71

Farmfoods -1

Iceland -17

All Others -32

Sainsbury's -36

Co-op -46

Independents -56

Morrisons -93

Tesco -481

Asda -515

Switching - Spend (£m)

52 w/e Jul 19 2015 vs. 52 w/e Jul 17 2016 Total Internet Grocery - Rolling 12 w/e growth

22 22

17 17 16 16 16 16 15 15 14 14

10 10 9 9 8 8 9 7 7 6 6 6

14- 12- 09- 07- 04- 01- 01- 29- 26- 24- 21- 19- 16- 13- 11- 08- 06- 03- 31- 28- 27- 24- 22- 19- 17- 14- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- 14 14 14 14 15 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16 16 Total Grocery Internet Lifestage Signatures 14

0 Pre-Family Young Middle Family 10+ Older Empty Retired Family 0-4 Family 5-9 Years Dependents Nesters Years Years 52 w/e Jul 17 2016 Total Grocery Internet Lifestage Signatures 14

0 Pre-Family Young Middle Family 10+ Older Empty Retired Family 0-4 Family 5-9 Years Dependents Nesters Years Years 52 w/e Jul 17 2016 In-store theatre Picture comparing a typical Aldi store entrance in Australia with its new look store in McGraths Hills in NSW Picture comparing a typical Aldi store entrance in Australia with its new look store in McGraths Hills in NSW Fairtrade Prepacked Bananas Market Share

100 Sainsbury 90

40 Total Grocers

0 30-Jul-06 01-Jul-07 27-Jul-08 25-Jul-10 22-Jul-12 20-Jul-14 09-Apr-06 21-Oct-07 06-Apr-08 18-Oct-09 04-Apr-10 16-Oct-11 01-Apr-12 28-Apr-13 13-Oct-13 26-Apr-15 11-Oct-15 04-Jun-06 14-Jan-07 01-Jun-08 11-Jan-09 28-Jun-09 09-Jan-11 26-Jun-11 06-Jan-13 23-Jun-13 04-Jan-15 21-Jun-15 31-Jan-16 11-Mar-07 08-Mar-09 06-Mar-11 03-Mar-13 30-Mar-14 01-Mar-15 12-Feb-06 10-Feb-08 07-Feb-10 05-Feb-12 02-Feb-14 18-Dec-05 19-Nov-06 16-Dec-07 16-Nov-08 13-Dec-09 14-Nov-10 11-Dec-11 11-Nov-12 08-Dec-13 09-Nov-14 06-Dec-15 24-Sep-06 26-Aug-07 21-Sep-08 23-Aug-09 19-Sep-10 21-Aug-11 16-Sep-12 18-Aug-13 14-Sep-14 16-Aug-15 06-May-07 03-May-09 30-May-10 01-May-11 27-May-12 25-May-14 Fairtrade Shares

Sainsbury's 30

Co-op 19

Tesco 19

Waitrose 10

Asda 8

Morrisons 7

M & S 5

Aldi 2

Iceland 1

Independents 1 Share of Fairtrade - 52 w/e Jul 17 2016 Lidl 1

Farm Foods 0 Not-Caged Eggs Market Share

100 Sainsbury’s 90

80 Morrisons 70

60 Asda

50 Tesco 40

30 01-Jul-07 27-Jul-08 25-Jul-10 22-Jul-12 20-Jul-14 21-Oct-07 18-Oct-09 16-Oct-11 13-Oct-13 11-Oct-15 06-Apr-08 04-Apr-10 01-Apr-12 28-Apr-13 26-Apr-15 01-Jun-08 11-Jan-09 28-Jun-09 09-Jan-11 26-Jun-11 06-Jan-13 23-Jun-13 04-Jan-15 21-Jun-15 31-Jan-16 11-Mar-07 08-Mar-09 06-Mar-11 03-Mar-13 30-Mar-14 01-Mar-15 10-Feb-08 07-Feb-10 05-Feb-12 02-Feb-14 16-Dec-07 16-Nov-08 13-Dec-09 14-Nov-10 11-Dec-11 11-Nov-12 08-Dec-13 09-Nov-14 06-Dec-15 26-Aug-07 21-Sep-08 23-Aug-09 19-Sep-10 21-Aug-11 16-Sep-12 18-Aug-13 14-Sep-14 16-Aug-15 06-May-07 03-May-09 25-May-14 30-May-10 01-May-11 27-May-12 Total Organic Grocery Products including Baby - 4 weekly £m

100

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total Organic Market (inc. Baby) Rolling 52 week periods Y-on-Y Change %

12 12 12 11 11 11 10 9

8 8 7 7 7 7 6 6 6 6 5 5 5 4 4 3 3 2 2 2 2 2 1 1 1 Where Lidl shoppers prefer to shop

< In other grocers In Lidl >

52 w/e Jul 17 2016 Where Aldi shoppers prefer to shop

< In other grocers In Aldi >

52 w/e Jul 17 2016 400 Tesco - Net New/Lost & Repeat Buyers - Contribution to Change

300

200

100

-100

-200 Actual Contribution (000,000s) Contribution Actual

-300

-400 17 Jul 16 19 Jul 15 20 Jul 14 21 Jul 13 11 Oct 15 11 Oct 16 24 Apr 12 Oct 14 12 Oct 15 26 Apr 13 Oct 13 13 Oct 14 Apr 27 14 Oct 12 14 Oct 13 28 Apr 19 Jun 16 19 Jun 21 Jun 15 21 Jun 16 03 Jan 16 31 Jan 22 Jun 14 22 Jun 15 04 Jan 23 Jun 13 23 Jun 14 05 Jan 06 Jan 13 06 Jan 27 Mar 16 01 Mar 15 29 Mar 15 28 Feb 16 02 Mar 14 30 Mar 14 01 Feb 15 03 Mar 13 31 Mar 13 02 Feb 14 03 Feb 13 08 Nov 15 08 Nov 15 06 Dec 09 Nov 14 09 Nov 14 07 Dec 16 Aug 15 16 Aug 15 13 Sep 10 Nov 13 Nov 10 13 Dec 08 17 Aug 14 17 Aug 14 Sep 14 11 Nov 12 11 Nov 12 09 Dec 18 Aug 13 18 Aug 13 15 Sep 22 May 16 24 May 15 25 May 14 26 May 13 Net New/Lost Repeat Total 250 Asda - Net New/Lost & Repeat Buyers - Contribution to Change 200

150

100

-50

-100

-150 Actual Contribution (000,000s) Contribution Actual -200

-250

-300 17 Jul 16 19 Jul 15 20 Jul 14 21 Jul 13 11 Oct 15 11 Oct 16 24 Apr 12 Oct 14 12 Oct 15 26 Apr 13 Oct 13 13 Oct 14 Apr 27 14 Oct 12 14 Oct 13 28 Apr 19 Jun 16 19 Jun 21 Jun 15 21 Jun 16 03 Jan 16 31 Jan 22 Jun 14 22 Jun 15 04 Jan 23 Jun 13 23 Jun 14 Jan 05 06 Jan 13 06 Jan 27 Mar 16 01 Mar 15 29 Mar 15 28 Feb 16 02 Mar 14 30 Mar 14 01 Feb 15 03 Mar 13 31 Mar 13 02 Feb 14 03 Feb 13 08 Nov 15 08 Nov 15 06 Dec 09 Nov 14 09 Nov 14 07 Dec 16 Aug 15 16 Aug 15 13 Sep 10 Nov 13 10 Nov 13 08 Dec 17 Aug 14 17 Aug 14 14 Sep 11 Nov 12 Nov 11 12 09 Dec 18 Aug 13 Aug 18 13 Sep 15 22 May 16 24 May 15 25 May 14 26 May 13 Net New/Lost Repeat Total 350 Aldi - Net New/Lost & Repeat Buyers - Contribution to Change

300

250

200

150

100 Actual Contribution (000,000s) Contribution Actual

0 17 Jul 16 19 Jul 15 20 Jul 14 21 Jul 13 11 Oct 15 11 Oct 16 24 Apr 12 Oct 14 12 Oct 15 26 Apr 13 Oct 13 13 Oct 14 Apr 27 14 Oct 12 14 Oct 13 28 Apr 19 Jun 16 19 Jun 21 Jun 15 21 Jun 16 03 Jan 16 31 Jan 22 Jun 14 22 Jun 15 Jan 04 23 Jun 13 23 Jun 14 05 Jan 06 Jan 13 06 Jan 27 Mar 16 01 Mar 15 29 Mar 15 28 Feb 16 02 Mar 14 30 Mar 14 01 Feb 15 03 Mar 13 31 Mar 13 02 Feb 14 03 Feb 13 08 Nov 15 08 Nov 15 06 Dec 09 Nov 14 09 Nov 14 07 Dec 16 Aug 15 16 Aug 15 13 Sep 10 Nov 13 Nov 10 13 Dec 08 17 Aug 14 17 Aug 14 14 Sep 11 Nov 12 11 Nov 12 09 Dec 18 Aug 13 18 Aug 13 15 Sep 22 May 16 24 May 15 25 May 14 26 May 13 Net New/Lost Repeat Total 200 Lidl - Net New/Lost & Repeat Buyers - Contribution to Change

180

160

140

120

100

60 Actual Contribution (000,000s) Contribution Actual 40

0 17 Jul 16 19 Jul 15 20 Jul 14 21 Jul 13 11 Oct 15 11 Oct 16 24 Apr 12 Oct 14 12 Oct 15 26 Apr 13 Oct 13 13 Oct 14 Apr 27 14 Oct 12 14 Oct 13 28 Apr 19 Jun 16 19 Jun 21 Jun 15 21 Jun 16 03 Jan 16 31 Jan 22 Jun 14 22 Jun 15 Jan 04 23 Jun 13 23 Jun 14 05 Jan 06 Jan 13 06 Jan 27 Mar 16 01 Mar 15 29 Mar 15 28 Feb 16 02 Mar 14 30 Mar 14 01 Feb 15 03 Mar 13 31 Mar 13 02 Feb 14 03 Feb 13 08 Nov 15 08 Nov 15 06 Dec 09 Nov 14 09 Nov 14 07 Dec 16 Aug 15 16 Aug 15 13 Sep 10 Nov 13 Nov 10 13 Dec 08 17 Aug 14 17 Aug 14 14 Sep 11 Nov 12 11 Nov 12 09 Dec 18 Aug 13 18 Aug 13 15 Sep 22 May 16 24 May 15 25 May 14 26 May 13 Net New/Lost Repeat Total % Aldi or Lidl shoppers also shopping in Mainstream in 4 w/e July

97.4 96.6 95.4 94.9 93.5

2012 2013 2014 2015 2016 The Agenda – The UK Background – Squeeze & Effect – Towards the Mainstream? – Invading the Repertoire – EDLP – and meaning it – The Response – The Fightback >– Frozen Insights

Year-on-Year Expenditure Trends - % change All Outlets

Healthcare 3.4

Fresh+Chilled 0.8

Alcohol 0.4

TOTAL GROCERIES -0.1

Frozen -0.8

Household -1.0

Ambient Groceries -1.2

52 w/e 14 Aug 16 Toiletries -1.7 Year-on-Year Expenditure Trends - % change Total Frozen Lidl 13.6 Aldi 9.6 Co-op 2.9 Farmfoods 1.6 Iceland 0.4 Total Grocers -0.9 Tesco -1.6 Sainsbury's -3.1 Waitrose -3.2 Morrisons -4.4 Asda -5.8 M & S -6.7 Independents -16.1 52 w/e 14 Aug 16 Share of Total Grocers - Total Frozen

Tesco 24.6 24.4

Iceland 16.3 16.5

Asda 14.4 13.7

Sainsbury's 12.4 12.1

Morrisons 9.1 8.8

Aldi 5.3 5.9

Farm Foods 4.2 4.3

Lidl 3.5 4.1

The Co-operative 3.8 3.9

Waitrose 3.4 3.3

M & S 1.1 1.0

Independents 0.7 0.6

52 w/e 16 Aug 15 52 w/e 14 Aug 16 Year-on-Year Expenditure Trends - % change Total Fresh & Chilled

Lidl 20.5 Aldi 19.8 M & S 5.8 Waitrose 4.2 Co-op 3.0 Total Grocers 0.7 Farmfoods 0.2 Sainsbury's -1.2 Tesco -1.7 Morrisons -3.5 Iceland -3.9 Asda -5.0 52 w/e 14 Aug 16 Independents -5.3 Share of Total Grocers - Fresh+Chilled

Tesco 28.2 27.6

Sainsbury's 17.3 17.0

Asda 15.4 14.5

Morrisons 12.1 11.6

Waitrose 6.7 7.0

M & S 6.6 6.9

Aldi 5.7 6.8

The Co-operative 5.6 5.8

Lidl 4.4 5.3

Iceland 1.6 1.5

Independents 1.0 0.9

Farm Foods 0.3 0.3

52 w/e 16 Aug 15 52 w/e 14 Aug 16 Trading Index Internet Delivery

Organic 193

Frozen 120

Household 118

Ambient Groceries 102

Fresh+Chilled 99

Toiletries 99

Alcohol 82

Healthcare 64 52 w/e Jul 17 2016 Trading Index Internet Delivery Take Home Soft Drinks 135 Savoury Carbohydrts+Sncks 130 Chilled Drinks 128 Canned Goods 126 Frozen Poultry+Game 126 Packet Breakfast 125 Savoury Home Cooking 124 Frozen Prepared Foods 122 Frozen Fish 121 Household & Cleaning Prds 121 Frozen Confectionery 115 Pickle+Tbl Sce+Condiment 115 Pet Care 112 Sweet Home Cooking 112 Fresh Poultry+Game 109 Dairy Products 108 Frozen Meat 106 Haircare 102 Take Home Savouries 102 Biscuits 100 Fruit+Veg+Salads 99 Fresh Meat 94 Hot Beverages 90 Chilled Convenience 89 Bathroom Toiletries 88 Oral-Care 84 Alcohol 82 Fresh Fish 79 Ambient Bakery Products 77 Chilled Bakery Products 75 Healthcare 64 52 w/e Jul 17 2016 Take Home Confectionery 60 Trading Index Internet Delivery

Fresh Poultry 114

Fresh Sausages 110

Fresh Bacon Rashers 99

Fresh Bacon Joint 94

Fresh Beef 93

Fresh Pork 85

Wet/Smoked Fish 80

Fresh Lamb 79 52 w/e Jul 17 2016 Frozen Food - Internet Share by Household Income 16.4 14.6

10.6 10.9 9.7

7.5 6.9 6.2

£0 - £9999 £10000 - £20000 - £30000 - £40000 - £50000 - £60000 - £70000 + pa £19999 pa £29999 pa £39999 pa £49999 pa £59999 pa £69999 pa 52 w/e Jul 17 2016 Frozen Food - Internet Share by Lifestage 15.1

12.9

10.2 10.0

7.0 7.0

3.5

Pre-Family Young Family Middle Family Family 10+ Older Empty Retired 0-4 Years 5-9 Years Years Dependents Nesters 52 w/e Jul 17 2016 Frozen Food Internet in Context 52 w/e 17 52 w/e 16 52 w/e 14 Aug 14 Aug 15 Aug 16 Total Frozen £bn 5.7 5.7 5.7 y/y % Change -0.3 -0.8 Internet Frozen £m 391 454 475 y/y % Change 16.0 4.6 Internet Share % 6.8 7.9 8.4 Internet Penetration %HH 20 22 22 Grocer Tripsize £ 4.65 4.58 4.50 Internet Tripsize £ 7.25 7.05 6.79 Frozen Food Ranges - Y/Y Growth £m - 52 w/e Jul 17 2016

Youngs Gastro 15.6 Birds Eye Field Fresh 9.4 Deluxe (Lidl) 9.2 Quorn 7.0 Albert Bartlett 6.8 Iceland Butchers Market 6.0 Iceland Classic 5.5 Birds Eye Inspirations 5.3 Chicago Town 5.0 Linda Mccartney (Hain) 4.5 Birds Eye Harry Ramsden 4.2 Ben+Jerrys 3.9 Artic Royal (Iceland) 3.5 Goodfellas Takeaway 3.5 Aldi Specially Selected 2.8 [email protected] twitter edgarner