1. The Coles Turnaround and “what our customers say about lamb” Allister Watson General Manager Meat, Deli, Dairy June 2012

2. We are all facing a subdued retail environment -5% 0% 5% 10% 15% 70% 75% 80% 85% 90% 95% 199519971999200120032005200720092011 Household Consumption (LHS) Household Saving (RHS) AustralianHousehold Consumption& Saving (per cent of household disposable income) 0 50 100 150 200 250 300 350 0 100 200 300 400 500 600 700 800 900 199519971999200120032005200720092011 Assets (Housing + Financial) Net wealth Debt (RHS) Australian Household Wealth (percent of household disposable income) 1 1 Lowest food inflation on record Consumer sentiment at GFC levelsHousehold wealth – a lost decade 20-year high saving rate – no signs of abatement Source: RBA Source: Westpac & University of Melbourne Source: ABS

3. 10 Strategies will deliver the circles of success

4. Regaining trust through value Multi- saves Saving Coles’ customers $800m+ p.a. Fewer, deeper promotions, driving volume Building trust through transparency & fairness Stronger customer trust built on consistently lower prices in staples Savings you choose driving basket size Great value fresh food, every day Value meal solutions Reinventing value delivery… again

5. Coles Improved category management End-to-end drive to improve quality, value & innovation in core food categories Collaborative partnerships with Australian suppliers – Developing products exclusive to Coles Product innovation ‒ Better ranging to come for local & ethnic communities ‒ Ethical sourcing for changing customer demands Improving in-store delivery – Planned traineeships in bakery & meat – All Team Members to be trained to Coles improved standards Collaborative partnerships Product innovation Improving in-store delivery

6. Compelling, engaging & unique Compelling, engaging & unique Brand Platforms –Intent on building the most famous Brand in Australia –Connecting with Australian families –Consistent Brand Platforms famous for delivering Quality, Value & Community Consistency in Message –Fewer & bigger campaigns –Reinforcing ‘Quality food costs less at Coles’ –Cut-through & brand linkage consistently above industry norm Industry average / norm. 71% 81% xx% 63% 72% 73% 92% 87% 70% Before After

7. Coles are committed to the lamb industry

8. What are customers looking for in our Lamb offer? Lamb purchase penetration peaks with Senior Couples, lowest with Young Transitionals: need to invigorate category with younger consumers Price-buying stronger in Supermarkets, quality seeking in butchers; supermarkets are more of a destination for Cutlets (quality important but can be expensive) Buyers of Lamb Leg Roast more likely to buy other cuts as well; therefore roast experience may effect broader portfolio Chops the most varied in terms of price-quality expectations, usage occasions etc

9. What are customers looking for in our Lamb offer? Quality Convenience Range Managing the impact of higher prices

10. 10 Importance: Fresh Lamb Cuts Top 10 important (Rating 1 to 5) (n=102) Rank vs. all categorie s 1QUALITY: freshness 36th 2QUALITY: consistent 9th 3QUALITY: great quality 29th 4PRICE: great prices 113th 5PRICE: good specials 53rd 6 CONVENIENCE: size of packs & products 27th 7 CHOICE: range of products for all needs 92nd 8 PREMIUM: able to get best XXX in retailer 65th 9DISPLAY: easily find what I want 101st 10SUSTAINABILITY: trust it to be safe 45th Q25. Still thinking about shopping for xxx in (retailer) compared to all other products you usually buy in supermarkets, how important is each statement to you when shopping for xxx in (retailer)? Source: Shopper Tracker, 2011 Quality of Lamb is the most important factor to customers. Quality attributes ranking as the top 3 importance factors to customers. In particular the consistency of lamb, where customers are looking for it more in Lamb than any other Meat category. Along with Beef, Lamb is a hero for Quality within the meat case. Important factors in Fresh Lamb Cuts

11. What are customers looking for in our Lamb offer? CONVENIENCE Australian customers are desperate for help in deciding what to eat and how to cook it - have limited knowledge of how to get beyond the basics, with nearly a 1/3 looking for more information on how to cook to help their meal planning & cooking The ongoing success of the mini roast, is tapping into consumers propensity for convenient, easy meal solutions.

15. What are customers looking for in our Lamb offer? RANGE A Premium range is an opportunity in most cuts Endorsement and Source region are the most opportune platforms to drive premium but not top of mind at present.

16. BUILDING THE PREMIUM/QUALITY PORTFOLIO Overall lamb purchase hierarchy Total Sample N=900, * See Appendix Higher for Roast* Higher for Other Cuts*

17. What are customers looking for in our Lamb offer? MANAGING THE IMPACT OF HIGHER PRICES Shoppers preference for ‘Saving me money’ rates higher than quality and on a par with Chicken, impacting Lamb by its higher prices in recent times. The type of value relates more to individual circumstance than occasion. Bundling (price, size, weight, quality) is a key consumer need when it comes to lamb purchase - Bundling expectations vary significantly by lamb cut and the portfolio should reflect this.

18. Our ongoing priority is to provide simplicity for our customers Best instore availability in Australia Give better value to our customers Simplified, lower cost supply chains More choice and innovation, less duplication