In Ireland Fresh Foods Comprise >56% of Total Grocery Spending

IRELAND FRESH REPORT IN IRELAND FRESH FOODS COMPRISE >56% OF TOTAL GROCERY SPENDING

FRESH FOODS:

• Contribute >56 percent of total grocery spending in Multiples • Help drive strong retailer equity • Are high-traffic volume boosters • Good value for money is a key demand of the Irish consumer

2 IRELAND FRESH REPORT Fresh foods currently contribute around 56% of total Grocery (including Personal Care) value sales on latest MAT in Nielsen TSR Multiples sales data (ROI)3. In terms of year on year growth, total Fresh Foods* performance is flat (-0.8% year on year) in line with total Food, Grocery and Personal Care performance (-0.5% year on year). The same trend is reflected in our latest Nielsen ShopperTrends survey2, where Irish shoppers claim fresh foods to be around 53 percent of total Grocery and Personal Care spend on average.

FRESH SHOPPERS ARE VALUABLE TO IRISH SUPERMARKETS

% Share of Fresh Expenditure 21% 56% MEAT & POULTRY & FISH FRESH 21% FOODS PRODUCE CONTRIBUTION TO TOTAL FOOD, DRINK & PERSONAL 38% CARE SALES IN MULTIPLES CHILLED CABINET LATEST MAT 15% BAKERY

5% DELI

Source: Nielsen latest TSR Multiples read: latest 12 months to we 14 April 2013

Average claimed monthly spending on food, grocery & personal care vs. fresh food in 2012

593

527 508

430 398 392 370 350 344 343 Europe Average 333 Euro 310 293 53% 287 286 273 48% 271 269 33% 48% 232 49% 51% 199 42% 46% 50% 168 41% 46% 46% 46% 155 40% 44% 47% 43% 44% 45% 63% 43%

Italy Spain France Austria Czech Norway Ireland Finland Sweden Bulgaria Slovakia Poland Denmark Belgium Portugal Germany RomaniaHungary Switzerland United Kingdom The Netherlands

TOTAL EXPENDITURE (EURO) FRESH FOOD (EURO) ALL CHANNELS

53% AVERAGE % FRESH FOOD ON TOTAL FOOD, GROCERY & PERSONAL CARE

Source: Latest Nielsen ShopperTrends (2012)

Financial struggles and budget pressures are still driving Irish FRESH - ARE WE HAVING consumers to make savings on the household shop, however recent OUR 5 SERVINGS A DAY? findings from the Nielsen Global Survey of Fresh Foods¹ revealed 67% of Irish respondents said they have at least 3 servings a day of Q. HOW MANY SERVINGS OF FRUIT & fresh fruit & vegetables, highlighting that Fresh is still a key critical VEGETABLES DO YOU CONSUME ON component of the weekly shop. AVERAGE PER DAY? (IRELAND) 67% SAY THEY CONSUME AT LEAST 3 SERVINGS OF FRUIT & VEG A DAY

Source: Nielsen Global Survey of Fresh Foods - Q3 2012

4 IRELAND FRESH REPORT FRESH IMPORTANT THOUGH NOT IMMUNE TO PRICE PRESSURES OR QUALITY ISSUES

Price fluctuations for fresh products are driven by supply and demand, adverse weather conditions, seasonality and industry issues (for example the recent horse meat crisis), and all can produce challenges in Fresh for the retailers. Understanding consumer demand and what they actually want, is a critical link to building successful strategies to improve both loyalty and profit margins.

The Irish consumer has become extremely price conscious in recent times. More than 60% compare prices when out shopping for groceries¹. In addition, half (49%) of Irish respondents in the latest Nielsen ShopperTrends Survey² said that rising food prices affect their purchasing of fresh fruit and veg, with meat and poultry categories impacted further (63%) and Fish & Seafood (65%).

In a measure of retailer equity for Ireland, the availability of high quality fresh foods was ranked among the top 10 drivers out of the 25 criteria measured. Interestingly ‘Everything I need in One Shop’ at No 4 suggests the consumer prefers not to have to shop around. However, as the impact of economic pressures continue, and shoppers do continue to shop around, it is critically important to understand where consumers go for a lower priced option and where they are willing to trade up because they perceive the value to be worth it. Fresh food is a high-traffic builder, and if you want to keep the consumer in the one shop, it is essential to have strong ranges and vibrant arrays of high quality products, with knowledgeable staff on hand.

1 PROVIDE ENJOYABLE SHOPPER EXPERIENCE

2 A PLACE WHERE IT’S EASY TO QUICKLY FIND

3 ALWAYS HAVE WHAT I WANT IN STOCK

4 EVERY THING I NEED IN ONE SHOP

5 PLEASANT STORE ENVIRONMENT

6 STAFF PROVIDE EXCELLENT CUSTOMER SERVICE

7 HAS HIGH QUALITY PREMIUM BRANDS

8 HAS A WIDER VARIETY OF PRODUCTS

9 WELL PRESENTED PRODUCT DISPLAYS

10 HIGH QUALITY FRESH FOOD

Source: Latest Nielsen ShopperTrends (2012) - Supermarkets

6 IRELAND FRESH REPORT IRELAND - WHERE WE FRESH FOOD IS SHOP FRESH FOODS A HIGH-TRAFFIC MEAT & POULTRY 62% BUILDER FOR SUPERMARKET SUPERMARKETS 3% HYPERMARKET In Ireland, we shop for Fresh foods 2.5 times per week on average, with shopping trips most frequent for fruits and vegetables (3.2 times per 23% week) and least frequent for fish and seafood (1.6 times per week). BUTCHER When it comes to where we shop for fresh food, the main supermarket channel reigns supreme in Ireland. Our Nielsen ShopperTrends reports 12% consumers in general shop up to 9.4 times a month in Supermarkets CONVENIENCE STORE / OTHER and the Fresh survey indicates that 70 percent on average of online respondents say they shop at Supermarkets in particular for Fresh Foods2. FISH & SEAFOOD While lowest at 62% for Meat & Poultry, this rises to 72% for Fresh Produce, 75% for Dairy and 78% for Delicatessen products. While open 64% markets and speciality shops for fruits and vegetables, and bakeries for SUPERMARKET breads are important destinations for these products throughout a lot of countries in Europe, this is not so in Ireland, and thus Supermarkets 3% win out here. However, in terms of Meat & Poultry, 23% say they buy at HYPERMARKET a butcher (a figure possibly higher since the horse meat crisis in 2013). 17% FISH SHOP

16% CONVENIENCE STORE / OTHER

FRUITS & VEGETABLES

72% SUPERMARKET 3% HYPERMARKET

9% FRUIT & VEG SHOP

16% CONVENIENCE STORE / OTHER

75% SUPERMARKET

3% HYPERMARKET

22% CONVENIENCE STORE / OTHER

BREAD & BAKERY

70% SUPERMARKET

3% HYPERMARKET

5% BAKERY

22% CONVENIENCE STORE / OTHER

DELICATESSEN

78% SUPERMARKET

4% HYPERMARKET

18% CONVENIENCE STORE / OTHER

Source: Nielsen Global Survey of Fresh Foods - Q3 2012

8 IRELAND FRESH REPORT TOP 3 RETAILER ATTRIBUTES WHEN SELECTING WHERE TO SHOP FOR FRESH FOODS

While ‘good value for money’ is generally the most important criteria for buying Fresh among Europeans, it is Freshness in Asia-Pacific, Latin America and Middle East/Africa (with slight variations from country to country reflective of the country and it’s culture). In GB, interestingly Convenience is of paramount important for Fresh Foods, while the French insist on high quality for their bread, and the Irish demand good value and high quality for their meat & poultry.

With the recent horse meat scare in Ireland, this demand for high quality is likely to be even more pronounced. Long term frozen burger sales are down (-47% year on year) in latest Nielsen TSR Multiples data on the current MAT³ and declines have spread to Frozen Meat Ready Meals (-23% year on year). The Association of Craft Butchers in Ireland also recently reported a 20% increase in shoppers picking their local butchers over supermarkets since the horsemeat scandal broke⁴.

EUROPE FRANCE GB IRELAND

Good value Good value Convenience Good value

Fresh Selection Convenience Good Value High Quality MEAT/ POULTRY Convenience High Quality Wide Variety Fresh Selection

Good value Good value Convenience Good value

Fresh Selection Convenience Good Value Fresh Selection FISH/ SEAFOOD Convenience High Quality Fresh Selection High Quality

Good Value Good Value Convenience Good Value

Fresh Selection Convenience Good Value Fresh Selection FRUITS/ VEGETABLES Convenience Local Produce Fresh Selection Convenience

Good Value Good value Convenience Good Value

Convenience Convenience Good Value Convenience DAIRY Wide Variety Wide Variety Wide Variety Fresh Selection

Fresh Selection High Quality Convenience Good Value

Good Value Good Value Good Value Convenience BREAD/ BAKERY Convenience Convenience Fresh Selection Fresh Selection

Good Value Good value Convenience Good value

Wide Variety Convenience Good Value Convenience DELICATESSEN Convenience Wide Variety Wide Variety Wide Variety

Source: Nielsen Global Survey of Fresh Foods - Q3 2012

10 IRELAND FRESH REPORT IRELAND – WHAT INFLUENCES ON WHERE YOU BUY? THE IMPORTANCE OF UNDERSTANDING HOW CONSUMERS SHOP FRESH

Fresh foods are integral to the success of the retailer and high-traffic volume boosters, thus expertise on shopper expectations is the key to unlock the potential. It is imperative to apply a style of category management based on the knowledge of the Irish consumer and to better understand how different consumer groups purchase fresh differently; at which stores, at which price points etc.

Improving the level of servicing in fresh store departments with friendly staff in key areas such as the meat, deli counter, bakery, produce departments, may gain customer respect. Customers appreciate the extra attention and efficient service. In terms of meat and poultry in particular, it is of utmost importance to ensure high quality standards and effectively communicate the source of produce.

Consumers buy fresh products with their ‘eyes’ and thus display and presentation are of critical importance. Freshness, quality, good value for money and importantly, the human connection are important factors that keep customers coming back for more. As a retailer, map shopper expectancy clusters, eating habits and supply patterns of fresh produce and find the balance. Applying some of these same characteristics to other product categories and to other parts of the store can bolster profits.

“THE BENEFITS OF USING CATEGORY MANAGEMENT TECHNIQUES AND PROCESSES ARE MORE CRITICAL THAN EVER FOR THE FRESH FOOD RETAILER GIVEN THE ECONOMIC ENVIRONMENT WE FIND OURSELVES IN.

NOT ONLY DOES IT GENERATE SHOPPER ENTHUSIASM FOR THE CATEGORY BY CREATING AN EASY TO NAVIGATE AND VISUALLY APPEALING SECTION, BUT IT ALSO SERVES A CRITICAL FUNCTIONAL PURPOSE BY MAKING THE BEST USE OF THE RETAIL SPACE AVAILABLE IN A MANNER THAT KEEPS PRODUCT WASTE TO A MINIMUM”.

MARK WALLEDGE, HEAD OF MERCHANDISING SERVICES, NIELSEN

IRELAND FRESH REPORT Copyright © 2013 The Nielsen Company 11 For any queries on the article please contact Karen Mooney [email protected] For any Merchandising Services queries please contact Mark Walledge [email protected]

Sources for article ¹ Source: Nielsen Global Survey of Fresh Foods, Q3 2012 - The survey revealed how much fresh foods we consume, where we shop for fresh products and why we shop these preferred retail channels.

² Nielsen ShopperTrends Survey 2012

³ Nielsen TSR Multiples data to w/e 14th April 2013 – (Tesco, Supervalu, Superquinn, M&S, Eurospar).

*Fresh Foods is defined as: Meat, Poultry, Fish, Bakery, Dairy, Deli Counter and Produce

**Total Food & Drink & Personal Care is defined as: Grocery, Frozen, Meat, Poultry, Fish, total Bakery, total Chilled Cabinet, Deli Counter, Produce, Alcohol and Health & Beauty

⁴ Irish Examiner 1st March 2013

ABOUT THE NIELSEN GLOBAL SURVEY

The Nielsen Global Survey of Fresh Foods was conducted between August 10 and September 7, 2012 and polled more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behaviour of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

12 IRELAND FRESH REPORT ABOUT THE NIELSEN SHOPPER TRENDS SURVEY

The Nielsen Shopper Trends Survey is an annual global study covering 54 markets with a total sample size of 87,000 respondents. The survey is conducted online or with face-to-face in home interviews depending on country and provides a comprehensive overview of fast-moving consumer goods retail environment trends, banner equity tracking and in-depth analysis of shopping patterns across markets and trade sectors, which includes modern and traditional trade and personal care stores.

ABOUT NIELSEN

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2013 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 13/6424

IRELAND FRESH REPORT

In Ireland Fresh Foods Comprise &gt;56% of Total Grocery Spending

In Ireland Fresh Foods Comprise >56% of Total Grocery Spending