Copyright © 2010 The Nielsen Company. Confidential and proprietary. 1 The New Consumer Economy: Insights into Post Recession Behavior James Russo Vice President: Global Consumer Insights

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 2 ConfidenceCreditCapitalism The Central Theme…..

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 3 Consumer Confidence Index Emerging Developed U.S. Consumer Confidence Remains Below Pre-Recession Levels Source: Nielsen Global Online Consumer Confidence and Opinion Survey 2Q10 Rebound indicative of elongated “L-shaped ” recovery curve

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 4 Monthly Job Gains/Losses August 2010: 9.6% Unemployment 16.7% Underemployed 42% unemployed for longer than 27 weeks Confidence Low Due to a Stubbornly Weak Labor Market Source: Seasonally Adjusted U.S. Total Non Farm Employment, U.S. Government

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 5 Which is Dramatically Affecting Segments Race/Ethnicity Asian: 7.2% White: 8.7% Afr-Amer: 16.3% Hispanic: 12.0% Age Group 20-24: 14.9% 25-34: 9.8% 35-44: 7.7% 45-54: 8.1% 55+: 7.3% Gender Women: 8.6% Men: 10.6% Education Less than high school diploma: 14.0% High school grad; no college:10.3% Some college, or assoc degree: 8.7% Bachelor degree and higher: 4.6% Source: Bureau of Labor Statistics August 2010 Unemployment Rates

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 6 As a Result Retail Sales Are Lackluster 2H08 Fear 2009 Cautious Rebound 2010 New Normal? Aug ‘08 Aug ‘09 Aug ‘10

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 7 Once you have covered your essential living expenses, what do you do with your spare cash? I spend it on… Source: Nielsen Consumer Confidence Survey Consumers Focused on Savings and Debt; But Some Increases in Discretionary

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 8 High Spending Low Savings High Spending Low Savings 2008/ Low Spending High Savings Low Spending High Savings Spending Savings Consumer Settling into a New Normal GOAL

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 9 We Are At Crossroads: Consumers Redefining Value “I’ll trade down even if it means sacrificing what I really want.” “I want what I want, but at the best price.”

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 10 Consumers are Continuing to Seek Value During the Recovery Only buy when on sale70% Use coupons60% Shop at value retailers38% Buy larger value packs35% Stock up when on promotion34% Shop close to home31% Switch to cheaper brands 25% Buy smaller sizes13% Source: Nielsen Global Consumer Confidence Survey (March 2010) - US Compared to last year, I will continue to save on household expenses by-

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 11 Consumers Taking Fewer Shopping Trips To All Outlets & Spending Less/Trip Source: Nielsen Homescan, excludes gas-only or Rx-only trips; versus year ago

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 12 Consumers Changed their Behavior, and the Changes Will Last Did This Past YearWill Continue To Do 66% Reduce entertainment 65% Save on gas & utilities 62% Spend less on clothes 60% Reduce take-out 52% Reduce Grocery Spend 60% Save on gas & utilities 41% Reduce take-out 34% Spend less on clothes 30% Reduce entertainment 37% Reduce Grocery Spend Source: Nielsen Global Online Consumer Confidence and Opinion Survey 2Q US The Conscientious Consumer

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 13 Recession Accelerated What Was Already Occurring for Store Brands Store Brand Unit Share of Store Over 5 Years (Data through July 10, 2010) Economic GrowthRecession GDP 3.1% 2.7% 2.1% 0.4% - 2.4% 3.0% 2010 Source: Scantrack®, a service of The Nielsen Company; (U.S. FDM excluding Walmart) 4-week increments (versus prior year); UPC-coded

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 14 Value Consumer = Price Value Consumer = Benefits/Price However, Value is Not About Price, it’s About the Balance between Price and Benefits

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 15 A Value Consumer is Willing to Switch Switching is driven by more than just price The rise of the Value Consumer increases uncertainty for businesses around customer loyalty

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 16 Innovation Critical to Winning Share of Wallet

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 17 Thoughts to Consider The New Normal is not so new anymore Given macroeconomic conditions, value will continue to play a dominate role in all facets of business decisions New technology will be the primary enabler of shopper engagements Increasing battle for supremacy between fixed & flexible Demise of traditional age & sex targets Time will be a critical asset as immediate access is pervasive This new consumer will wield increasing power and influence With an ever challenging consumer, loyalty will be the metric from which decisions are based

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 18

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 19 By 2037, nearly one-in-three U.S. households will be headed by someone over 65 By 2037, nearly one-in-three U.S. households will be headed by someone over 65

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 20 After 2020, household spending on packaged goods will begin to fall

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 21 By 2020, less than 30% of US Households will have kids and most of those will be multicultural

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 22 Circa 2028, U.S. women, on average, are expected to earn more than men

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 23 By 2020, the global middle class will be a staggering 52% of the world’s population

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 24 One-of-every-four people on the planet (1.9 billion) has access to the Internet via PCs

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 25 Mobile phones will overtake PCs as the most common Web access devices by 2015

Copyright © 2010 The Nielsen Company. Confidential and proprietary % of Americans use TV and the Internet Simultaneously

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 27 The world adds the equivalent of seven New York Cities to the planet every year

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 28 It Is More Critical to Understand the New Consumer Economy diversedemandingemergingconnected

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 29 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Thank you James Russo Vice President: Global Consumer Insights