The Scottish difference Date here The Scottish difference Mark Thomson 1

Only a year ago… Premium Organic Values Eating out Prompted awareness higher: Females (69% vs 61% males) 18-34s (71%) and 35-44s (70%) vs 53% of 45+s ABC1s (70% vs 64% C2DEs) Those living in Aberdeen/Dundee (78% vs 65% Edinburgh and 55% Glasgow)

And now… Value Planning ahead Stability Eating in Prompted awareness higher: Females (69% vs 61% males) 18-34s (71%) and 35-44s (70%) vs 53% of 45+s ABC1s (70% vs 64% C2DEs) Those living in Aberdeen/Dundee (78% vs 65% Edinburgh and 55% Glasgow)

So what has been the overall impact? A couple of housekeeping points before I continue, Firstly, the methodology is mainly focussed on our purchasing panel of 15000 households when focussing on Retailer share and consumer dynamics I’ll also use the usage panel for elements of the presentation Price inflation The fixture The consumer

Average Inflation across 75,000 items is 9.1% Dry Pasta +45.0% Eggs +33.0% Cooking Oils +26.0% Butter +23.0% Flour +19.7% Bread +17.7% Average Inflation across 75,000 items is 9.1% 5

12% of Grocery net growth (total Discounters) Discounters have attracted +92,786 shoppers over the last year in Scotland alone. Prompted awareness higher: Females (69% vs 61% males) 18-34s (71%) and 35-44s (70%) vs 53% of 45+s ABC1s (70% vs 64% C2DEs) Those living in Aberdeen/Dundee (78% vs 65% Edinburgh and 55% Glasgow)

What are the Options – “I need to reduce spend” Buy less categories No Trading Down Retailers Yes Spending less Money Buy on Offer Yes Trade down price tiers Yes

What do Scottish households spend more money on? Fresh Vegetables Fresh Fruit Wine Fresh Milk Spirits Cheese Beer & Lager Chilled Ready Meals Chocolate Confectionery Cooked Meats Bread Fresh Poultry Fresh Beef Breakfast Cereal Morning Goods Wine Spirits Fresh Vegetables Fresh Fruit Fresh Milk Chilled Ready Meals Chocolate Confectionery Beer & Lager Cooked Meats Cheese Bread Fresh Beef Fresh Poultry Morning Goods Breakfast Cereal (X10) And there has been a shift amongst children. Imagine the longer term impact which current media coverage may have in-store from Jamies School Dinners. TNS Worldpanel – 52 W/E 10th August 2008 Ranked on total spend (£)

Rolling source of change – Fresh Fruit in Scotland Fewer shoppers purchasing less volume of Fresh Fruit in Scotland moving into 2008. Rolling source of change – Fresh Fruit in Scotland TNS Worldpanel - 52 W/E 10th August 2008

Portions of Fruit and Vegetables per day Scotland – decline driven by adults …although children are under-performing vs the GB average Portions of Fruit and Vegetables per day 5 a day fruit & veg defined as… Vegetables: fresh seed, fresh leaf, prepared, salad, fresh continental, fresh root (exc potatoes), tinned tomatoes, baked beans & variations Fruit: tinned/vacuumed, frozen, fresh soft, fresh medium, dried Fruit & Vegetable Juices GB Scotland Total Consumption – 12 m/e May periods

Health not top of Scottish consumers minds Index of Scotland v GB

So what is the main difference to the last recession in the early 1990’s? OK - this map shows the obesity map produced by the UK Government’s Foresight report indicating the trends in obesity observed over the last 18 years. Many commentators have suggested that the speed with which obesity levels have changed in the population indicates rapid changes to the way that we live our lives. The prevalence of obesity (BMI>30kg/m2) in Scotland has increased over the past two decades, reaching 22% in men and 24% in women in 2003. Obesity in children is now common. In Scotland, nearly one in five (18%) boys and over one in ten (14%) girls aged 2–15 years are obese. Women in Scotland are more likely to be obese than women in England but levels of obesity among Scotland has one of the highest levels of obesity among OECD countries, second only to the United States of America. (Grant, et al. 2007) Prevalence of obesity (BMI > 30) in UK women 1994 - 2002 Tackling Obesities: Future Choices http://www.foresight.gov.uk 2007

Scottish obese less likely to choose for health reasons % of occasions chosen for health

Buying local now more important in Scotland than ever….an avenue? % of all respondents who agree to the Statement ‘I Try To Buy Local Produce Whenever I Can’ (X10) And there has been a shift amongst children. Imagine the longer term impact which current media coverage may have in-store from Jamies School Dinners. TNS Worldpanel – 52 W/E 9th September 2007 () - % change v 2006

Little steps are more achievable Moderation Trading down within markets Little steps are more achievable Moderation Kids and families are more open to change Emotions have more connection Icons can work