1. 1 A Service SUPERMARKET OUTLOOK Breaking out of the sales doldrums May 2013 KELLY TACKETT Research Director RICH MITCHELL Senior Retail Analyst

2. 2 1.Supermarket Channel Overview 2.Competitive Landscape 3.Channel Trends 4.Instore Activity 5.Outlook & Implications Contents

3. 1. Supermarket Channel Overview

4. 4 Supermarket channel sales growth remains sluggish. Along with channel maturity and a saturated marketplace, a wider range of retailers from different channels are siphoning off some supermarket sales by giving added emphasis to food merchandising. *Note: Convenience store sales represent merchandise sales only; f – forecast. Source: US Department of Commerce; National Association of Convenience Stores; Planet Retail CAGR 2012-2017f CAGR 2012-2017f 3.4% 3.7% 3.6% 3.4% 4.9% 8.4%

5. 5 As more retailers enhance their food selections, the supermarket channel's share of total grocery format sales is declining. With price and convenience major drivers, the value and warehouse club channels are especially primed to attract more shoppers. *Note: Convenience store sales represent merchandise sales only; f – forecast. Source: US Department of Commerce; National Association of Convenience Stores; Planet Retail