Kantar consumer research, March 2012

ROI GROCERY MARKET REVIEW– Data to 18th March 2012 © Kantar Worldpanel

OVERVIEWMarket Overview• The annual market sales are ahead of last year, with growth of +0.2% year-on-year.• Over the shorter term, market value has declined 0.5% as shoppers buy more volume despite price inflation, and compensate by purchasing on offer and trading down to cheaper lines.• Consumers are making more shopping trips, but the average spend per trip has reduced by 3.7%.• Private label continues to be important as a method of reducing spend with a market share at 35.4%. © Kantar Worldpanel

The Irish grocery market is in growth over 52w by just +0.2%. Over 12w, thegrocery market is in decline of -0.5% in comparison to same period last year.Total Grocery - market value & YoY %chg €8,946,826 €8,884,903 €8,900,643 €000s €1,966,316 €1,983,684 €1,973,568 -0.7% +0.2% +0.9% -0.5% 52 w/e 21 52 w/e 20 52 w/e 18 12 w/e 21 12 w/e 20 12 w/e 18 Mar 10 Mar 11 Mar 12 Mar 10 Mar 11 Mar 12 KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Quarterly, the majority of markets falls back while Alcohol has a strong performancethis quarter12w Total Grocery - sectors value shares & YoY %chg Share of total trolley Total Grocery -0.5 Alcohol* 3.6 Ambient Food 28% Fresh & Chilled Healthcare -1.6 Produce Household -4.4 Household 7% 49% Toiletries -6.5 Frozen 5% Toiletries 4% Ambient Food -0.9 Healthcare 2% Alcohol 6% Fresh & Chilled 0.3 Frozen Food 0.0 Total Trolley -0.5% value KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Hot Beverages, Fresh Fish and Chilled Drinks have performed best year on year.12w Total Grocery - value % chg by category KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Alcohol, Drinks and Snacks have the highest proportion of packs sold on deal.Staples such as Dairy, Bakery and Canned Goods have lower promotional levels12w Total Grocery - pack % sold on deal by category KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

100% 10% 20% 30% 40% 50% 60% 80% 90% 0% 70% 12 w/e 30 Dec 07 12 w/e 27 Jan 08 12 w/e 24 Feb 08 12 w/e Mar 08 12 w/e 20 Apr 08 12 w/e 18 May 08 12 w/e 15 Jun 08 12 w/e 13 Jun 08 12 w/e 10 Aug 08 consumer spend 12 w/e 07 Sep 08 12 w/e 05 Oct 08 12 w/e 02 Nov 08 12 w/e 30 Nov 08 12 w/e 28 Dec 08 12 w/e 25 Jan 09 12 w/e 22 Feb 09 12 w/e 22 Mar 09 12 w/e 19 Apr 09 12 w/e 17 May 09 12 w/e 14 Jun 09 12 w/e 12 Jul 09 12 w/e 09 Aug 09 12 w/e 6 Sep 09 12 w/e 4 Oct 09 Markets in Deflation 12 w/e 01 Nov 09 12 w/e 29 Nov 09 12 w/e 27 Dec 09 12 w/e 25 Jan 10 12 w/e 21 Feb 10 12 w/e 21 Mar 10 12 w/e 18 April 10 12 w/e 16 May 10 12 w/e 13 Jun 10 12w Total Grocery – proportion of markets in growth & decline 12w/e 11 July 10 12w/e 08 Aug 10 12 w/e 05 Sept 10 12 w/e 03 Oct 10 12 w/e 31 Oct 10 12 w/e 28 Nov 10 Markets in Inflation 12 w/e 26 Dec 10 12 w/e 23 Jan 11 12 w/e 20 Feb 11 12 w/e 20 Mar 11 12 w/e 17 Apr 11 12 w/e 15 May 11 12 w/e 12 Jun 11 12 w/e 10 Jul 11 12 w/e 07 Aug 11 12 w/e 04 Sep 11 While inflation is still very evident, it begins to fall back slightly, impacting on 12 w/e 02 Oct 11 12 w/e 30 Oct 11 12 w/e 27 Nov 11 12 w/e 25 Dec 11 12 w/e 22 Jan 12 12 w/e 19 Feb 12 12 w/e 18 Mar 12 KANTAR WORLDPANEL: DATA TO 18th March 2012© Kantar Worldpanel

Change in Household Spend and Inflation rateHousehold Spend has dropped back by -0.5% YoY as inflation rate slows % change year on year – 12 weekly period KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

With less disposable income, shoppers are looking for ways to cut back in any way they can and grocery is no exception The average individualdisposable income is €21,010 €3,370 less than in as we enter 2012. 2008, and €1,150 less than last year (2010). Source: CSO Household Budget Survey KANTAR WORLDPANEL: DATA TO 18th March 2012 9 © Kantar Worldpanel

15.0% 10.0% 0.0% 5.0% -5.0% -15.0% -10.0% 30th Dec 07 27th Jan 08 24th Feb 08 23rd Mar 08 20th Apr 08 18th May 08 15th Jun 08 13th Jul 08 10th Aug 08 07th Sept 08 05th Oct 08 02nd Nov 08 30th Nov 08 Promotion/Product Change 28th Dec 08 25th Jan 09 22nd Feb 09 22nd Mar 09 19th Apr 09 17th May 09 14th Jun 09 12th Jul 09 09th Aug 09 Store Choice 06th Sep 09 04th Oct 09 01st Nov 09 29th Nov 09 27th Dec 09 24th Jan 10 21st Feb 10 21st Mar 10 Inflation 18th Apr 10 12w Total Grocery - consumer coping strategies trended 16th May 10 13th June 10 purchasing on offer and trading down product lines 11th July 10 08th Aug 10 05th Sep 10 03rd Oct 10 31st Oct 10 28th Nov 10 26th Dec 10 23rd Jan 11 Volume per buyer 20th Feb 11 20th Mar 11 17th Apr 11 15th May 11 12th Jun 11 10th Jul 11 07th Aug 11 04th Sep 11 02nd Oct 11 30thOct 11 HH Spend Change 27thNov11 25thDec11 Shoppers are buying more volume this year, in order to reduce spend, they are 22ndJan12 19thFeb12 18thMar12 KANTAR WORLDPANEL: DATA TO 18th March 2012© Kantar Worldpanel

Strong growth in budget products as shoppers trade down price tierGrocery Volume Growth by Price Brand Growth in Grocery sales (Volume) Change in sales Share of sales 20.0 15.0 19.3 14.6 15.0 Super Premium 10.0 20.1 5.8 Premium 5.0 33.5 Good - -1.3 -5.0 Standard -6.3 14.1 -10.0 Budget (Median Standard Good (Median Premium Super Prem Budget -50%) (Median -25%) price) (Median +25%) (Median +75%) 13.1 % Volume KANTAR WORLDPANEL: DATA TO 18th March 2012 11 © Kantar Worldpanel

10.0% 12.0% 2.0% 4.0% 0.0% 6.0% 8.0% 23 Mar 08 20 Apr 08 18 May 08 15 Jun 08 13 Jul 08 10 Aug 08 07 Sep 08 05 Oct 08 02 Nov 08 30 Nov 08 28 Dec 08 25 Jan 09 22 Feb 09 22 Mar 09 19 Apr 09 17 May 09 14 Jun 09 12 Jul 09 % of sales accounted for by round € 09 Aug 09 of deals to the Irish grocery market 06 Sep 09 04 Oct 09 01 Nov 09 29 Nov 09 27 Dec 09 24 Jan 10 21 Feb 10 21 Mar 10 18 Apr 10 16 May 10 13 Jun 10 11 Jul 10 08 Aug 10 12 w/e to 22nd Jan 2012 05 Sep 10 03 Oct 10 31 Oct 10 28 Nov 10 26 Dec 10 23 Jan 11 20 Feb 11 20 Mar 11 17 Apr 11 15 May 11 12 Jun 11 10 Jul 11 07 Aug 11 Total Grocery 04 Sep 11 Share of sales has 02 Oct 11 30 Oct 11 stabilised over the last year averaging at 11% of The prevalence of mechanics such as round euro pricing shows the importance 27 Nov 11 25 Dec 11 22 Jan 12 KANTAR WORLDPANEL: DATA TO 18th March 2012© Kantar Worldpanel

Irish households are shopping more often this year, but spending an average of€0.80 less per trip as a result of promotions and trading down12w Total Grocery - changes in consumer shopping behaviour Average frequency increased by +3.3% €6 decrease in 12w spend per HH (-0.5%) Average basket spend reduced by -3.7% KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Growth in the number of shopping trips across Ireland continues to put moreemphasis on smaller basket shops 2010 2011 Trolley 10+ items 58.7% 58.5% % of grocery spend Basket 4-9 items 36.9% 37.3% Destination 1-3 items 4.4% 4.2% KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Private label continues to be important as a method of reducing spend and now seesthe highest share in two years of Irish grocery12w Total Grocery – PL value% KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

In the current climate, more emphasis is placed on traditional values Health is becoming more important in the minds of consumers 49%: family breakfast (32%) 62% agree: I try to buy local 87%: sunday lunch (72%) 76%: Saturday meal (60%) More emphasis ondoing our bit for the More emphasis on ineconomy and buying home occasions local % of shoppers agreeing to the 61%: nutrition impacts statements Source: KWP lifestyle and attitudes survey 2011 KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

UK CURRENT THEMES• Product choice is still the main strategy for trading down• Inflation still evident in UK grocery and average spend per household is in growth• Value Own Label is now gaining from all other tiers• Own label still remains strong in UK KANTAR WORLDPANEL: DATA TO 18th March 2012 © Kantar Worldpanel

Inflation is also a factor in UK grocery while average spend per household isin growthUK Inflation and household spend change10.0 9.0 Inflation 8.0 HH Spend change 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 KANTAR WORLDPANEL: DATA TO 18th March 2012 20 © Kantar Worldpanel

Cheaper products remain the main way for shoppers to manage their spend 4 3 TRADING UP AND TRADING DOWN STRATEGIES Contribution to growth %pts 2 1 0 -1 -2 -3 -4 12-Jun-11 10-Jul-11 27-Nov-11 15-May-11 23-Jan-11 22-Jan-12 07-Aug-11 20-Mar-11 12-Oct-11 30-Oct-11 18-Mar-12 26-Dec-10 17-Apr-11 20-Feb-11 04-Sep-11 25-Dec-11 19-Feb-12 Volume change Store Choice Promotions Product Choice Total Grocery 12 we 18 Mar 2012 (KWP P04) KANTAR WORLDPANEL: DATA TO 18th March 2012 21 © Kantar Worldpanel

Cheaper price tiers also seeing growth in UKGrocery Packs Growth by Price Band Growth in Grocery sales (Packs) Change in sales Share of sales 8.0 6.3 6.0 7.8 4.7 10.8 4.0 Super Premium 2.0 0.0 31.6 Premium -0.1 -2.0 Good -4.0 -3.5 22.3 -6.0 Standard -6.5 -8.0 -7.9 -10.0 27.5 Budget All Budget Standard Good Premium Super Purchases Premium Share KANTAR WORLDPANEL: DATA TO 18th March 2012 22 © Kantar Worldpanel

Shoppers trading down from brands and down the Own Label tiers NET SWITCHING THROUGH PRICE TIERS IN THE BIG 4 UK RETAILERS Premium Own Label Branded Standard Own Label Value Own Label Switching limited to Big 4 retailers and 4 tiers Total Grocery 12 we 18 Mar 2012 (KWP P04) KANTAR WORLDPANEL: DATA TO 18th March 2012 23 © Kantar Worldpanel

Kantar consumer research, March 2012

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