1. Asda Beef & lamb customer insight

2. 5,000 colleagues (3 rd largest NI employer) Market Share c.17% 19mn UK customers

3. Asda Mission To be Britain’s most trusted retailer Asda Purpose Save money. Live better. EDLC = EDLP

4. CUSTOMER PLEDGES

5. Perfect retail storm

6. Competition – market is polarising

8. Convenience & Price deflation

9. Asda Income Tracker £180 Source: Asda Income Tracker /CEBR £88

10. Asda Income Tracker Dashboard: January Annual percentage changeIndicator +1.7%Regular earnings growth* Recent trend -2.5% Food & non-alcoholic drinks -16.2% Vehicle fuels -2.0% Home electricity, gas & fuel -0.1%Essential item inflation +9.3%Family spending power +2.0%Employment growth* 10

11. Asda Our response

12. OUR CUSTOMER PROPOSITION - DELIVER VALUE

13. INVESTING IN MARKET LEADING VALUE Price £1bn£250m Simple, compelling, disruptive Quality Communication

14. ...AND THROUGH THE PRICING PYRAMID Overall Direction of Travel

15. Asda Beef & lamb Results?

16. Asda are growing ahead of the Market in Total Red Meat by 9.3%pts (Asda 6.7%, Market -2.6 RED MEAT SHARE Source: AC Nielsen Value growth

17. INVESTING IN FRESH BEEF QUALITY MATURATION 15 days increased to 21 and 28 day maturation to deliver flavour SPECIFICATION Easy carve joints Steaks specifications delivering industry leading consistency PACKAGING 1 st to market skin packaging in core range

18. Innovation in packaging and price SKIN PACKAGING Product continues to mature in pack Flavour and tenderness benefits Reduced packaging – better for environment 1 st to market on core product for Asda 2 FOR £7 FIXED WEIGHT PROMOTION Driving volume sales of steaks Market leading sales growth

19. INVESTING IN BEEF ROASTING JOINTS EASY CARVE SPECIFICATION We removed all soft core muscles Removing waste from our customers plate Consistency for carving

20. INNOVATION IN BEEF ROASTING JOINTS OVENABLE BEEF JOINTS Shoppers nervous about cooking Beef Joints New innovation (first to market) with ABP where joint in packaging goes straight into the oven Consistent, easy, no washing up Lower cooking time than standard roasting Helping our customers

21. Westwood strongest growth in lamb sales YoY up 16.8% Portadown most growth in red meat up 18.2% driven by beef up 23.8% INNOVATION AND CONVENIENCE IS DRIVING OUR GROWTH Continues to mature in packaging Delivers 2 weeks Shelf life (2 weekends to sell) Skin Pack OvenableLamb 2 for £7 Continues to mature in packaging Improved shelf life and convenience for Asda Mums Replicating success seen in Beef Steaks offer Sales growth and reduced waste with new skin packaging

22. Asda are growing ahead of the Market in Lamb by 9.9%pts (Asda 2.9%, Market -7.0%). FRESH LAMB SHARE Source: AC Nielsen Value growth

25. Asda Closer look at customer insight

26. Our pledges are important to us, tracked quarterly – shoppers perceptions are improving in Meat Source: Category Perception Tracker Results for Asda Top 3 Box = Shoppers rating us 8,9 or 10 out of 10

27. Fresh meat is often the hero of the meal – it needs to meet strict personal quality standards Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500) “It’s probably one of the most expensive bits of my shopping, but you don’t want to scrimp with meat” “I always get the one from the back, never the front” “I just can’t stand it when it’s got veins in it – it makes me feel sick” “You have to watch what you’re buying with meat sometimes – it could have all sorts in it”

28. Shoppers believe fresh meat quality varies between retailers – trust in quality is critical for repeat purchase Source: Nat rep survey. Q12. You said you buy fresh meat from >. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary). Nat rep survey. Q18. To what extent do you agree or disagree with the following statements about shopping for fresh meat? Base: All respondents (1,500). Promiscuous shopping habits means holding onto shoppers is increasingly important – If shoppers have a bad personal experience with meat from a particular retailer it can take a long time to regain that trust ‘Horsegate’ has heightened awareness of quality processes surrounding fresh meat “You have to watch what you’re buying with meat sometimes – it could have all sorts in it”

29. Driving trust in Asda’s fresh meat quality

30. Driving quality in fresh meat involves shouting about all the quality procedures Asda has in place Store Product / Price Brand / Communications “You want the store to look nice – it shows that they are taking care of their meat” “Aldi is always talking about how good the quality of their products are on their adverts so I thought I would give them a go” “Sometimes you need to try something to really know if it’s good quality – if I try something and it’s not, I wouldn't buy it again” Quality perception

31. Out of store, shoppers need to believe in the brand quality – quality cues in communications Asda’s brand isn’t instantly associated with quality – prices and promotions are usually cited as the main reason for shopping at Asda (for all categories) Prices are important, but combine these messages with quality cues in communications. Local Quality processes Butcher’s Selection

32. If the aisle doesn’t deliver, shoppers will lose trust Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500) Determining quality in run Neat and tidy displays Reassurance on quality through POS Easily finding what you need Well stocked Tilted shelves – products hard to see Out of stock

33. New POS works well to convey quality throughout the aisle making it feel neater and clearly sectioned The color black feels more premium and sophisticated For some, prices and offers were felt to stand out more down the aisle than before Positive reaction to new POS “It looks good, feels a bit more sophisticated!”

34. Shout about awards – shoppers like to hear about them Source: Nat rep survey. Q12. You said you buy fresh meat from >. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary). “Tha’s really good to know but I had no idea. They should definitely tell people about it more – why wouldn’t you tell people about something like that?”

35. At fixture, products are thoroughly inspected – any discolouration or short dates are avoided Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500) Determining quality of product Colour / appearance of meat Short dates Provenance Cut / type Display Poor quality products noted everywhere “You want it to be red – sometimes they’re a bit brown, and you know it’s on the turn” Browning meat Discoloured Amount of fat

36. Vac packed packaging is really appealing – allows customers to see enough of the product 60% Packaging appeal Top 2 58%48% 28% Source: Nat rep survey Q23. Looking at the different types of fresh meat packaging shown below, please state how appealing or unappealing you find each one. (Base:1500) Can see lots of the product Looks fresh Looks good quality Can see lots of the product Looks fresh Looks good quality Can see lots of the product Looks fresh Looks good quality Looks fresh Looks good quality ₓ Can’t see enough of the meat Save customer time and removes the hassle/worry of cooking Drives quality perceptions – allows for close inspection of meat and shows freshness

37. For shoppers who don’t like to handle fresh meat, poor packaging can be the start of a bad meat experience Source: Nat rep survey. Q12. You said you buy fresh meat from >. Why do you buy fresh meat from here? Base: All who buy fresh meat from each retailer (base sizes vary). “I mean it just looks awful – what do you do with it? What is it?” Unappealing and hard to identify

38. Driving trust in Asda’s fresh meat prices

39. Shoppers aren’t looking for ‘cheap meat’ – they want to feel like they’re getting a great deal on great quality Source: Nat rep survey. Q20. Thinking about when you usually buy fresh meat, which of the following actors are important to you when deciding what to buy? Q50. To what extent do you agree or disagree with the following statements about fresh meat? Base: Total sample (1,500) Getting meat from a retailer I perceive to be great quality Getting the most for my money Getting a great deal on something I know should be more expensive Getting added value e.g. Award winning, convenience etc VFM is... Help shoppers work out VFM on pack by highlighting.... Prices Dates Promotions Watch out – on pack information used is functional – prices, dates and portion sizes. Quality and brand cues often missed – communicate these using POS, packaging colour and format

40. Driving trust in Asda’s fresh meat range

41. Younger shoppers buy a wider variety of meats, and consume fresh meat more often than older shoppers Source: Nat rep survey. Q6b. When you are usually buying the following types of meat, how much do you tend to buy in one go? Base: Total sample (1,500). Q19. Which of the following best describes what you’re thinking about before you go shopping to buy fresh meat? Base: Those who buy fresh meat from Asda (459) Turkey Duck Breaded Added value 18-34 (32% regularly buy their fresh meat from Asda) 55+ (24% regularly buy their fresh meat from Asda) Eat fresh meat more regularly than older shoppers and have a wider repertoire of proteins Significantly more likely to purchase Significantly more likely to buy meat from Significantly more likely to use smaller formats to buy fresh meat from Pork Significantly more likely to purchase Significantly more likely to buy meat from Asda fresh meat shoppers significantly more likely than younger age groups to cite quality as a reason to buy fresh meat from Asda Take more factors into account when buying fresh meat Butcher

42. I like to see and pick it up myself – 37% I don’t think the staff would pick the same quality I would - 32% I don’t trust the dates will be long enough – 20% Shoppers are wary of buying fresh meat online because they can’t make their own personal product selections Why not? Q11. You said you shop online for your groceries but not your fresh meat. Why do you not buy fresh meat online? (Base:157) Q2C. When buying fresh meat products online, what helps you determine whether the meat is good quality? (Base:704) “The guy who is picking my meat isn’t going to rifle through and pick the best one like I would” 2 in 5 Asda online shoppers don’t buy their fresh meat online – in line with the market

43. Providing clearer information on where the meat has been sourced may help aid quality perceptions online “ That information is just too small and not something I would spend my time reading” To help determine the quality of a product, online shoppers currently use: The cut – 43% Provenance – 42% Type of meat – 34% Source: Nat rep survey Q11. You said you shop online for your groceries but not your fresh meat. Why do you not buy fresh meat online? (Base:157) Source: Survey with Asda.com meat shoppers Q2C. When buying fresh meat products online, what helps you determine whether the meat is good quality? (Base:704) Q4A. Which of the following is important to see on Asda.com with fresh meat products? (Base:704) The information is currently too small and often not read by shoppers – make this more prominent. 32% of Asda.com fresh meat shoppers disagree that it’s easy to judge the quality of the meat online

44. Butchers are one of the most trusted sources of information on how to eat healthy with fresh meat Source: Nat rep survey Q47. Which organisations would you trust to tell you information about how to eat healthily with fresh meat? (Base: 1500) 1/4 of shoppers would trust a supermarket 38% of shoppers would trust a butcher to tell them information about how to eat healthily with fresh meat

46. Asda Beef & lamb Thank you