1 A Service Strategic Preview: Q3 September – November November 2012 NATALIE BERG Global Research Director

2 Analyst Comment: Strategic Preview: Walmart Q3 “We’re expecting strong seasonal merchandising to have helped drive sales and traffic in Q3. Back-to-school, Halloween and early holiday initiatives have been centered around value, which will have resonated strongly with Walmart’s core shoppers. We’re expecting layaway - introduced a month earlier this year - to have brought some Christmas spending forward into Q3 as budget-conscious shoppers look to spread their seasonal dollar. While this may be good news for the Q3 numbers, it is also likely to have a negative impact on next quarter’s figures. Internationally, we are expecting slowed growth in Asia and Latin America. Despite trading in a broadly flat market, the UK business is expected to have put in a solid performance due to a continued focus on price and quality. However, it’s important to keep in mind that the US remains not only Walmart’s most important market but is also, contrary to popular belief, their largest growth opportunity. We’re expecting the US to generate an additional USD55 billion in sales by 2017*.” “We’re expecting strong seasonal merchandising to have helped drive sales and traffic in Q3. Back-to-school, Halloween and early holiday initiatives have been centered around value, which will have resonated strongly with Walmart’s core shoppers. We’re expecting layaway - introduced a month earlier this year - to have brought some Christmas spending forward into Q3 as budget-conscious shoppers look to spread their seasonal dollar. While this may be good news for the Q3 numbers, it is also likely to have a negative impact on next quarter’s figures. Internationally, we are expecting slowed growth in Asia and Latin America. Despite trading in a broadly flat market, the UK business is expected to have put in a solid performance due to a continued focus on price and quality. However, it’s important to keep in mind that the US remains not only Walmart’s most important market but is also, contrary to popular belief, their largest growth opportunity. We’re expecting the US to generate an additional USD55 billion in sales by 2017*.” NATALIE BERG Global Research Director *From 2012 levels

1.Expectations for the Quarter 2.US: Q3 Strategic Changes 3.Global: Q3 Strategic Changes 4.Outlook 5.What’s new at Planet Retail Strategic Preview: Walmart Q3

4 With four consecutive quarters of positive growth behind it, Walmart US is well and truly back on track. We are expecting comps to remain in the low single digits in Q3.

5  US likely to have benefited from a well-executed and value-focused seasonal merchandising strategy. But how much will early holiday merchandising eat into Q4 sales?  Will be looking out for an update on Express. Walmart has made their Neighborhood Market intentions very clear, but we believe this will come at the expense of the smaller Express format.  Overall, we’re expecting another quarter of positive comp growth in the US, a sign that simply focusing on the core shopper – through value and increasingly digital initiatives – pays off.  Internationally, we are likely to hear that growth has slowed in China in particular. Walmart is not alone here, but nonetheless we’ll be expecting an update on how they plan to improve performance of existing stores. Could we see store closures as Tesco has done?  The UK is expected to have outperformed peers once again, as its promise of quality and low prices resonates with shoppers. Compared to its peers, Asda still has a way to go in terms of multi-channel and we expect initiatives such as mobile and grocery click & collect to be ramped up in Q3 expected to show stabilization at home but signs of weakness overseas.