1. A summary Update of the Irish Grocery Market Data to 12th June 2011

2. Grocery Performance Summary
The 52 week market value sales have turned around and is showing growth of +1.1% year on year. The latest quarter shows market value growth at +0.9% year on year.
Price inflation continues to bring value into the market but shoppers cut back on volume bought.
Shoppers continue to battle price inflation by reducing spend by trading down to a cheaper product, shopping in cheaper stores, buying on promotion or buying own label products.

3. HOW IS THE TOTAL GROCERY MARKET PERFORMING
HOW IS THE TOTAL GROCERY MARKET PERFORMING? The grocery market has returned to 52 week growth, with short terms sales ahead of last year
-6.1%
+1.1%
-5.2%
+0.9%
12 we €000’s
52 we €000’s

4. HOW IS THE TOTAL GROCERY MARKET PERFORMING
HOW IS THE TOTAL GROCERY MARKET PERFORMING? 4 W/E The market shows 4 week value growth at +1% year on year
4 we €000’s
-3.6%
+1.0%
KANTAR WORLDPANEL: 4 W/E 12th June 2011

5. % Value Growth in Total Grocery
GROCERY MARKET IN 12 & 4 WEEK GROWTH The grocery market continues in growth over shorter periods
% Value Growth in Total Grocery 5

6. % Markets in Inflation vs Deflation6
12w/e 12th June 2011

7. TOTAL GROCERY MARKET 12w VALUE GROWTH & INFLATION
TOTAL GROCERY MARKET 12w VALUE GROWTH & INFLATION? ROI grocery market has seen price inflation ahead of value sales growth
12w/e 12th June 2011

8. What has been the Effect on Shopper Behaviour?
SHOPPERS ARE MAKING THE SAME NUMBER OF TRIPS THIS YEAR, BUT SPENDING 50c LESS ON EACH OCCASION WHEN COMPARED TO THIS PERIOD LAST YEAR

9. Reducing quantity purchased- Less per trip Cheaper Brands/Formats
How are consumers reducing their spend?
Reducing quantity purchased- Less per trip
Cheaper Brands/Formats
More Own label
Promotions
Cheaper stores

10. How are consumers reducing spend?
Volume -1.54%
Price paid -0.73%
Trade down -4.75%
Inflation +3.88%
Store -0.54%
Product /Promo -4.21%
*Slight definitional difference in Price paid
12 w/e 12 Jun 2011

11. 12w DRIVERS OF TOTAL MARKET PERFORMANCE Price inflation now at +4% with shoppers reacting by buying more on offer, or trading down to a cheaper option
Contributions of Change % 11
12w/e 12th June 2011

12. As shoppers buy less, basket missions gain from trolleys
% of grocery spend
2010
58.9%
36.8%
4.3%
2011
57.4%
38.0%
4.5%
Trolley
Basket
Destination 12

13. Shoppers are trading down in 69% of markets to a cheaper format13
12w/e 12th June 2011

14. Private Label Value Share of Grocery
12w PRIVATE LABEL VALUE SHARE OF TOTAL GROCERY MARKET Private label value share is at 35% of market sales, and has not dropped back after the new year pickup
Private Label Value Share of Grocery
12w/e 12th June 2011

15. Grocery Packs Growth by Private Label Tier Budget private label products see an increase in Pack sales
Growth in Grocery sales (Packs)
Share of sales
Change in sales

16. TOTAL GROCERY – 52w % PERCEIVED PACKS SOLD ON DEAL Although promotional activity has slowed slightly, consumers still choose to buy 14% of their grocery volume on deal

17. PROMOTIONAL ACTIVITY IN THE TOTAL GROCERY SECTOR % Value sold on deal remaining steady this period17
12w/e 12th June 2011

18. PROMOTIONAL ACTIVITY IN THE TOTAL GROCERY SECTOR
% Packs Sold on Deal in Total Grocery, 18
12w/e 12th June 2011

19. TOTAL GROCERY – 52w % PERVEIVED PACKS SOLD ON DEAL – PROMO TYPE Pickup in MultiBuy packs this year, but less Money off and Extra Free promotions

20. Grocery Sector Analysis - Summary

21. TOTAL FOOD YEARLY AND QUARTERLY SALES The food market comes back into positive growth vs the same time last year
-5.3%
1.6%
-5.1%
1.8%
52 we €000’s
12 we €000’s
52w/e 12th June 2011

22. HOW IS THE FOOD MARKET PERFORMING ON TRENDED BASIS
HOW IS THE FOOD MARKET PERFORMING ON TRENDED BASIS? % VALUE GROWTH VS LAST YEAR, 12 WEEKLY TRENDED
12w/e 12th June 2011

23. WHICH SECTOR IS DRIVING MARKET RETURN TO GROWTH
WHICH SECTOR IS DRIVING MARKET RETURN TO GROWTH? Ambient and Fresh foods are driving market performance this period
Value share
Value change
12w/e 12th June 2011

24. UK Overview &
Consumer coping strategies.

25. GROWTH AND INFLATION Growth plateaus creating a divergence from inflation
This chart tracks overall Market Sales Growth with our measure of inflation. Inflation is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers and therefore represents the most authoritative figure currently available.  It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods.
Grocery (RST) 12we 12 June 2011 (KWP P7)
12w/e 12th June 2011 25

26. Trading-up and Trading-down Strategies Shoppers manage their spend mainly by promotions.
The difference between household inflation and household spend growth is how shoppers manage their spend – either trading up or trading down. This chart splits out the 4 components of how shoppers can manage their spend and quantifies the difference between inflation and household spend
HH Volume Change – contribution from households on average buying more or less volume
Store Choice – contribution from households moving spend from / to more or less expensive retailers. We classify each retailer on a simple average price index (inclusive of mix effects) to determine the direction of these movements
Promotion Choice – contribution from households buying more/less of their volume on promoted products
Produce Choice – contribution from households buying more/less expensive products – e.g. buying a value own label instead of a brand.
Grocery (RST) 12we 12 June 2011 (KWP P7)
12w/e 12th June 2011

27. Change in sales Share of sales
UK Grocery Packs Growth by Price Brand UK also continue to see rise in budget pack sales as they trade down from standard and Good options
Growth in Grocery sales (Packs)
Change in sales
Share of sales
12 W/e 12 Jun 11

28. MARKET VIEW - UK KANTAR WORLDPANEL
MARKET TRENDS
Market growth levels now at 4.4%, just behind inflation at 4.6%
Inflation rate at 4.6% for this period, is due to an increase in the number of markets displaying inflation within 5-10% range (rather than a few markets in the double digit range). In particular, alcohol and cereal dependent markets have seen significant rises. These latest rises mean we now anticipate inflation rising towards 5%.
The growth in budget sales indicate shoppers choosing to buy cheaper products. The inexorable growth in promotions is showing signs of slowing, though it is still the most significant factor driving change in shoppers’ choice.