US WAREHOUSE CLUB OUTLOOK Consistent execution, strong growth November 2013 SANDY SKROVAN Research Director - US

Contents Planet Retail’s View Macro Backdrop Club Landscape Club Performance Key Trends & Initiatives Expanding footprint Multi-channel momentum Driving membership & retention Enhancing member value Mix shifts: What’s hot Outlook Further Reading

2. Macro Backdrop: ‘Fragile’ economic conditions Economic conditions remain ‘fragile’ despite an easing unemployment rate. Value shopping and bargain hunting have become the new normal, due in large part to the Great Recession. Affluent shoppers often use warehouse clubs as their value alternative, picking up deals by bulk-buying and treasure hunting. A 7.3% unemployment rate in August was the lowest in almost five years. The unemployment rate is steadily trending down from the 9-10% range where it hovered for 2.5 years until late 2011. Source: US Bureau of Labor Statistics

5. Key Trends & Initiatives: Driving membership & retention – create social media buzz Sam’s Club took to social media this past year to generate awareness and grow membership. Sam’s Club used LivingSocial to generate additional club membership by offering extraordinary deal pricing. For 48 hours in March, a one-year membership was offered for USD45. The deal also included a USD20 Sam's Club gift card and coupons for free products (e.g. cookies, pizza and rotisserie chicken). Coupon dates were staggered to generate multiple member trips. Sam’s Club memberships purchased on LivingSocial 157,000 © Sam’s Club

5. Key Trends & Initiatives: Mix shifts: What’s hot – fresh foods The enhancement and addition of more fresh foods is a key factor used to draw members into the club on a more frequent basis. Product demonstration programs are increasingly being used to encourage item trial and membership.