© Kantar Worldpanel A Summary Update of the Irish Grocery Market to 3 rd October 2010.

© Kantar Worldpanel

A Summary Update of the Irish Grocery Market to 3rd October

2010


Grocery Performance Summary

– The total grocery market continues to come out of decline with value growth for the latest 12 weeks now at 1.2%. With the number of sub-markets in growth steadily increasing, overall market recovery is becoming more evident.

– Shopper spend is not rising in line with inflation in the latest period. Value growth remains flat over the latest month.

– Frozen food is driving the volume (pack) growth while the value growth is driven by the household sector.

2


HOW IS THE TOTAL GROCERY MARKET PERFORMING? 52 & 12 WEEKS ENDINGROI GROCERY MARKET COMES OUT OF DECLINE ON A 12 WEEK BASIS

9,367,539 9,263,4398,850,175

2,107,577 1,998,193 2,022,918

52 w/e 05Oct 08

52 w/e 04Oct 09

52 w/e 03Oct 10

12 w/e 05Oct 08

12 w/e 04Oct 09

12 w/e 03Oct 10

52 we €000’s

-1.1% -4.5%

12 we €000’s

-5.2% 1.2%


HOW IS THE TOTAL GROCERY MARKET PERFORMING (PACKS)? 52 & 12 WEEKS ENDING 03th OCT 2010 – VOLUME GROWTH

4,889,141 5,160,083 5,168,763

1,134,797 1,155,382 1,173,462

52 w/e 05Oct 08

52 w/e 04Oct 09

52 w/e 03Oct 10

12 w/e 05Oct 08

12 w/e 04Oct 09

12 w/e 03Oct 10

52 we €000’s

+5.5% +0.2%

12 we €000’s

+1.8% 1.6%


HOW IS THE TOTAL GROCERY MARKET PERFORMING? 4 W/E

705,340

660,949

674,950

4 w/e 05 OCT 08 4 w/e 04 OCT 09 4 w/e 03 OCT 10

4 we €000’s

-6.3%+2.1%


6

4 W/E VALUE GROWTH OF 2.1% AS THE TOTAL GROCERY MARKET COMES OUT OF DECLINE OVER SHORTHER PERIODS

% Value Growth in Total Grocery

-5.2 -5.5-6.3

-6.8

-7.8 -7.6 -7.6-6.9

-6.5

-5.2

-3.5

-1.8

0.1

1.2

-6.3

-4.9

-7.6 -7.5-8.4

-6.9-7.5

-6.4-5.6

-3.6

-1.2-0.5

2.1 2.1

-10

-8

-6

-4

-2

0

2

4

12w/e04Oct09

12w/e01

Nov09

12w/e29

Nov09

12w/e27Dec09

12w/e24Jan10

12w/e21Feb10

12w/e21

Mar10

12w/e18Apr10

12w/e16

May10

12w/e13Jun10

12w/e

11 Jul10

12w/e08

Aug10

12w/e05Sep10

12w/e03Oct10

12 w/e % chg4 w/e % chg


WHICH SECTOR IS DRIVING MARKET GROWTH? 12 W/E – ALCOHOL IS THE ONLY MARKET STILL IN DECLINE ON A 12 W/E BASIS WITH HOUSEHOLD DRIVING THE VALUE GROWTH

8.0 7.51.3 1.37.0 7.24.3 4.3

26.1 26.5

48.3 48.2

4.9 5

12 w/e 04 Oct 09 12 w/e 03 Oct 10

Value share Value change

1.2

-6.0

2.0

4.0

1.7

2.6

1.2

1.7

Total Grocery

Alcohol

Healthcare

Household & Petcare

Toiletries

Ambient Food

Fresh & Chilled Food

Frozen Food


WHICH SECTOR IS DRIVING MARKET PACK GROWTH? 12 W/E 03 OCT 10 – FROZEN FOOD DRIVING VOLUME GROWTH FOR THE TOTAL GROCERY MARKET

2.5 2.50.5 0.57.1 7.22.7 2.7

28.7 27.9

54.9 55.4

3.6 3.7

12 w/e 04 Oct 09 12 w/e 03 Oct 10

Volume share (Pack) Volume (Pack) change

1.6

3.1

-4.4

2.6

2.5

-0.9

2.5

4.4

Total Grocery

Alcohol

Healthcare

Household & Petcare

Toiletries

Ambient Food

Fresh & Chilled Food

Frozen Food


PROMOTIONAL ACTIVITY LEVELS OFF AT 17% OF ALL GROCERY SALES GOING THROUGH ON DEAL. THE LOWEST PROMOTIONAL LEVELS IN TWO YEARS HELPS TO DRIVE THE VALUE GROWTH WITHIN THE MARKET

19.520.3 20.3 20.1

19.7 19.5 19.820.2 20.0

19.519.1 19.0

18.519.0 19.1

19.7 19.519.1

18.4 18.1 18.3 18.3 18.1 17.9 17.617.0 17.0

10

12

14

16

18

20

22

12 w

/e 0

5 O

ct 0

8

12 w

/e 0

2 N

ov 0

8

12 w

/e 3

0 N

ov 0

8

12 w

/e 2

8 D

ec 0

8

12 w

/e 2

5 Ja

n 09

12 w

/e 2

2 Fe

b 09

12 w

/e 2

2 M

ar 0

9

12 w

/e 1

9 Ap

r 09

12 w

/e 1

7 M

ay 0

9

12 w

/e 1

4 Ju

n 09

12 w

/e 1

2 Ju

l 09

12 w

/e 0

9 Au

g 09

12 w

/e 0

6 Se

p 09

12 w

/e 0

4 O

ct 0

912

w/e

01

Nov

09

12 w

/e 2

9 N

ov 0

9

12 w

/e 2

7 D

ec 0

9

12 w

/e 2

4 Ja

n 10

12 w

/e 2

1 Fe

b 10

12 w

/e 2

1 M

ar 1

0

12 w

/e 1

8 Ap

r 10

12 w

/e 1

6 M

ay 1

0

12 w

/e 1

3 Ju

n 10

12 w

/e 1

1 Ju

l 10

12 w

/e 0

8 Au

g 10

12 w

/e 0

5 Se

p 10

12 w

/e 0

3 O

ct 1

0

9

% Sold on Deal in Total Grocery, € Value Sales


% PACK SALES SOLD ON DEAL

15.9

17.216.6

16.215.7

16.3

17.2 17.2 17.0 16.716.2

15.614.8

15.3 15.616.0 15.9 15.7 15.5 15.2

15.6 15.5 15.515.0

14.514.0 13.9

10

12

14

16

18

20

22

12 w

/e 0

5 O

ct 0

8

12 w

/e 0

2 N

ov 0

8

12 w

/e 3

0 N

ov 0

8

12 w

/e 2

8 D

ec 0

8

12 w

/e 2

5 Ja

n 09

12 w

/e 2

2 Fe

b 09

12 w

/e 2

2 M

ar 0

9

12 w

/e 1

9 Ap

r 09

12 w

/e 1

7 M

ay 0

9

12 w

/e 1

4 Ju

n 09

12 w

/e 1

2 Ju

l 09

12 w

/e 0

9 Au

g 09

12 w

/e 0

6 Se

p 09

12 w

/e 0

4 O

ct 0

912

w/e

01

Nov

09

12 w

/e 2

9 N

ov 0

9

12 w

/e 2

7 D

ec 0

9

12 w

/e 2

4 Ja

n 10

12 w

/e 2

1 Fe

b 10

12 w

/e 2

1 M

ar 1

0

12 w

/e 1

8 Ap

r 10

12 w

/e 1

6 M

ay 1

0

12 w

/e 1

3 Ju

n 10

12 w

/e 1

1 Ju

l 10

12 w

/e 0

8 Au

g 10

12 w

/e 0

5 Se

p 10

12 w

/e 0

3 O

ct 1

0

10

% Sold on Deal in Total Grocery,


8.1

6.1

0.9

6.9

8.4

1

6.4

7.8

1

Volume mechanics Money Off Other Offer

52 w/e 05 Oct 08 52 w/e 04 Oct 09 52 w/e 03 Oct 10

HOW HAVE THE PROMOTIONAL MECHANICS CHANGED? MONEY OFF IS THE MOST POPULAR PROMOTION MECHANIC BUT THE TOTAL ON OFFER DECLINES THIS YEAR

% volume on deal type


PRIVATE LABELThe average shopper spent €1,827 on Private Label products this year

Private Label products featured in 66% of all shopping trips

In the latest year Private Label products were worth a total of €2,9bn

52 w/e 05 Sep10

There are currently 30,730 Private Label SKUs in the ROI market, +27% more than in 2008


Private label has stabilised at a third of the market share30

.8

30.9

31

30.4 30

.9 31.1

32.3

32.2

32.2 32.4 32

.8 33

33.3

33.1

32.9

32.4

32

32.6 33

33.5

33.2

32.9

33 32.9

32.9

32.8

32.9

32.6

33.5 33

.8 34.1

33.3

33.1

33.1

33.2 33

.5 33.8 34

.5 34.7

34.8

34.5

34.3

34.2

34 34.2

34.3 34

.7 35 35.1

34.9

34.5

34.2

34 34.2

12 w

/e 0

5 O

ct 0

8

12 w

/e 0

2 N

ov 0

8

12 w

/e 3

0 N

ov 0

8

12 w

/e 2

8 D

ec 0

8

12 w

/e 2

5 Ja

n 09

12 w

/e 2

2 Fe

b 09

12 w

/e 2

2 M

ar 0

9

12 w

/e 1

9 Ap

r 09

12 w

/e 1

7 M

ay 0

9

12 w

/e 1

4 Ju

n 09

12 w

/e 1

2 Ju

l 09

12 w

/e 0

9 Au

g 09

12 w

/e 0

6 Se

p 09

12 w

/e 0

4 O

ct 0

9

12 w

/e 0

1 N

ov 0

9

12 w

/e 2

9 N

ov 0

9

12 w

/e 2

7 D

ec 0

9

12 w

/e 2

4 Ja

n 10

12 w

/e 2

1 Fe

b 10

12 w

/e 2

1 M

ar 1

0

12 w

/e 1

8 Ap

r 10

12 w

/e 1

6 M

ay 1

0

12 w

/e 1

3 Ju

n 10

12 w

/e 1

1 Ju

l 10

12 w

/e 0

8 Au

g 10

12 w

/e 0

5 Se

p 10

12 w

/e 0

3 O

ct 1

0

% Value share

% Packs share

13

Private Label Share of Grocery


PRIVATE LABEL HAS GROWN SHARE STEADILY OVER THE LAST 10 YEARS

16.2 17.522.2

25.628.2 29.3 29.9 30.7 32.6 32.8

2001 2002 2003 2004 2005 2006 2007 2008 2009 52 w/e 05Sep 10

Private Label Share of Spend

46.3%46.8%46.4%GB Equivalent 46.5%

PL Levelling off?


15

Total Grocery– Key Dynamics to 03 October 2010

less frequently

?

fewer categories?

reduced quantity?

Buy less?

different retailer?

cheaperproducts?

more promotions?

Pay less?

Con

trib

utio

ns t

o C

hang

e %


% Markets in Growth vs Decline

16


11

69 7062

54

19

-5+ 0 to -5 0 to +2.5 2.5 to 5 +5 to +10 10+

Inflation Bands

Nu

mb

er

of

Ma

rke

ts in

ea

ch

Infl

ati

on

Ba

nd

17

We now have more categories with prices going up

80 Categories WithDeflation 205 Categories With Inflation

05 September 2010


Total Grocery evolution – Inflation and shopper reactionAlthough inflation continues to rise, shopper spend remains flat. Household spending is not in line with rising inflation.

1812 w/e 03 Oct 2010


19

So what is the effect on shopper behaviour?

No of Trips per Household

58.2 56.8

12 w/e 04 Oct 09 12 w/e 03 Oct 10

Spend per Trip

€21.70 €21.80

12 w/e 04 Oct 09 12 w/e 03 Oct 10

Average Spend per Household

€1,265

€1,239

12 w/e 04 Oct 09 12 w/e 03 Oct 10

People aren’t shopping around as much this quarter and spend less vs. this time last year.

2008 2010

Shop 241 Times Shop 250 Times

-10%

-13%

-9%

+7%

+4%

Within 6.5 Different Stores Within 7 Different Stores

Full Store Trolley Missions Top Up Baskets

Spend €25.6 Each Time Spend €22.3 Each Time

Adding to €6,172 on Groceries Adding to €5,572 on Groceries


The number of markets where shoppers are choosing more expensive or non-promoted products has dropped slightly this quarter.

4347

40 4237 36 35 33 31 30

43

26 28 25 26 25 24 26 27 2833 30 27 28 31

3642 39

43

3539

4740 38

12 w

/e 2

4 Fe

b 08

12 w

/e M

ar 0

812

w/e

20

Apr 0

812

w/e

18

May

08

12 w

/e 1

5 Ju

n 08

12 w

/e 1

3 Ju

n 08

12 w

/e 1

0 Au

g 08

12 w

/e 0

7 Se

p 08

12 w

/e 0

5 O

ct 0

812

w/e

02

Nov

08

12 w

/e 3

0 N

ov 0

812

w/e

28

Dec

08

12 w

/e 2

5 Ja

n 09

12 w

/e 2

2 Fe

b 09

12 w

/e 2

2 M

ar 0

912

w/e

19

Apr 0

912

w/e

17

May

09

12 w

/e 1

4 Ju

n 09

12 w

/e 1

2 Ju

l 09

12 w

/e 0

9 Au

g 09

12 w

/e 6

Sep

09

12 w

/e 4

Oct

09

12 w

/e 0

1 N

ov 0

912

w/e

29

Nov

09

12 w

/e 2

7 D

ec 0

912

w/e

25

Jan

1012

w/e

21

Feb

10

12 w

/e 2

1 M

ar 1

0 12

w/e

18

Apri

l 10

12 w

/e 1

6 M

ay 1

012

w/e

13

June

10

12 w

/e 1

1 Ju

ly 1

012

w/e

8 A

ug 1

012

w/e

05

Sept

10

12 w

/e 0

3 O

ct 1

0

% of markets where shoppers are trading up

21


22

Total Grocery Packs Growth by Price BrandConsumers continue to opt for lower priced products

Growth in RST sales (Packs)

Change in sales Share of sales

12 w/e 03 Oct 2010


ALCOHOL IS THE ONLY MARKET STILL IN DECLINE OVER ALL PERIODS. TOILETRIES AND AMBIENT FOOD ARE SHOWING STRONG GROWTH IN THE LATEST 4WEEKS

23

-4.5 -5.3-4.0

-5.7-7.9

-2.8-4.6

-5.8

1.2

-6

24

1.7 2.61.2 1.72.1

-1.8

1.7

5.74

2 1.1

TotalGrocery

Alcohol Healthcare Household& Petcare

Toiletries AmbientFood

Fresh &ChilledFood

FrozenFood

52 w/e Change 12 w/e Change 4 w/e Change

% Value Change


DISCOUNTER OVERVIEW - SUMMARY– Discounters continue to grow. In the last ten years they have managed acquire 9.6% of value share, and 13.4% of volume.

– Discounters have attracted 1,351,185 households over the last year

– Footfall for the discounters is increasing by over 400 visits per week. Consumers are becoming more loyal and return to the discounters every ten days.

– Average basket size is €19.00, dropping slightly this period.

– Yearly growth for the discounters is driven by Alcohol and fresh and chilled.

Discounters continue growth through store openings. Combined, Aldi and Lidl currently have 195 stores


Brief Overview of UK Market


UK Grocery evolution – Inflation and shopper reactionWe are seeing inflation rate above average household spend for the first time this year

0

1

2

3

4

5

6

7

8

9

10

804

805

806

807

808

808

809

810

811

812

813

901

902

903

904

905

906

907

908

909

910

911

912

913

1001

1002

1003

1004

1005

1006

1007

1008

1009

1010

1011

Inflation HH Spend change

2612 w/e 03 Oct 2010


UK Total Grocery Packs Growth by Price BrandPremium products are driving growth in the UK

24

21

34

12

9

% Packs

SuperPremium

Premium

Good

Standard

Budget

Growth in Grocery sales (Packs)

1.5

-0.3

1.1

2.3

1.6

4.7

-1

0

1

2

3

4

5

AllPurchasing

Budget(Median -

75%)

Standard(Median -

25%)

Good(Medianprice)

Premium(Median+25%)

Super Prem(Median+75%)

Change in sales Share of sales

12 w/e 03 Oct 2010


UK Grocery update to 03rd Oct 2010

–As expected, inflation has increased again to 3.0 and we can expect this to continue until the end of the year.

–Average price per pack continues to rise with inflation.

–Majority of retailers are in growth.

–Promotional activity is the main factor used by households to reduce their spending.

© Kantar Worldpanel A Summary Update of the Irish Grocery Market to 3 rd October 2010.

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Transcript of © Kantar Worldpanel A Summary Update of the Irish Grocery Market to 3 rd October 2010.