Gourmet Cooks:  Cooking Up Retailer Opportunities Todd Hale, SVP Consumer & Shopper Insights August 22, 2008 as seen on:  ...
Todd Hale SVP, Consumer & Shopper Insights Nielsen Consumer Panel Services <ul><ul><li>30 years of experience in the area ...
<ul><li>Economic Outlook </li></ul><ul><li>U.S. Retail Trends </li></ul><ul><li>Gourmet Meal Habits </li></ul><ul><li>Gour...
U.S. Economic Outlook:  How Rocky Is The Road? Page  Page
The Answer Is…..….Pretty Rocky <ul><li>-  Minutes of the Federal Open  Market Committee, June 24-25, 2008 </li></ul>Page  ...
Forces at Work:  Consumer Wallet Pressures Page  <ul><li>Personal debt servicing </li></ul><ul><li>Home energy </li></ul><...
Overall Cost of Living Rising Sharply Consumers Can Not Keep Up With Necessities Page  Source: U.S. Department of Labor St...
Energy Needs Becoming the #1 Household Spending Item Page  Annual household spend fueling up; assumes 12,000 per year, ave...
Global Demand Pushes Gas to $4/Gallon; Can $5/Gallon Be Far Off? Page  Dept of Energy
Declining Consumer Confidence (Index  100  = 1985 Confidence Level) Page  March 2008 January 2008 January 2007 January  20...
Forces at Work:  CPG Margin Pressures Page  <ul><li>Commodities at all time highs </li></ul><ul><ul><li>Barley (+47%) Corn...
So, Tough Times for Growth & How Important Are  Value, Variety & Convenience  to You?  <ul><li>How are you  equipped to co...
Page  U.S. Retailing Trends
Value & Convenience Winning As Evidenced By Increased Store Count Page  U.S. Store counts Source: Trade Dimensions® & TDLi...
Some Big Players Going w/Smaller Grocery Format  Page  <ul><li>Half the Size of a Neighborhood Market </li></ul><ul><li>Re...
Wal-Mart & Target Leading Store Expansion versus Major Grocers Page  *Includes Division 1, Supercenters, Neighborhood Mark...
Niche Grocery Store Count Growth From Natural/Gourmet & Deep Discounters Page  U.S. Store counts Source: Trade Dimensions®...
Rapid Store Growth From Leading Drug  Chains; Warehouse Stores Growing too   Page  U.S. Store counts Source: Trade Dimensi...
Some Major Gourmet Food Retailers Page  22 locations in the Twin Cities area Source: Company Websites 15 California locati...
Nugget Markets Page  “ a family-owned business …since 1926, …started in Woodland, California … now with seven Nugget Marke...
Nugget Markets Page  Specialty   Cheese Indulgent Chocolates Fresh Flowers & Produce Prepared Foods Bakery In-store Cafe
Nugget Markets – Homepage on Website Page  “ Low Prices:  With all of our focus on quality, it’s sometimes hard for our gu...
Shopping Behavior Trends <ul><li>Retailers can grow their sales by: </li></ul><ul><ul><li>Increasing their  shopper base <...
Value Winning As Evidenced By Consumer Acceptance Page  *Includes Kmart, Target & Wal-Mart Supercenters Benefits from new ...
Value Channels Grabbing Trips Page  Grocery & Mass trips continue to drop  *Includes Kmart, Target & Wal-Mart Supercenters...
Value Retailing Driving Price Compression Page  *Includes Kmart, Target & Wal-Mart Supercenters Average $ basket ring —t o...
Page  Gourmet Meal Habits of U.S. Households
1/3 rd  of U.S. Households Occasionally or Frequently Consume a Gourmet Meal Page  Source: Homescan®, a service of The Nie...
Most Gourmet Meals Eaten @ Restaurant, but Sizeable At-Home Market Page  Source: Homescan®, a service of The Nielsen Compa...
Gourmet Meals Prepared in One of Five Households @ Least Monthly Page  Source: Homescan®, a service of The Nielsen Company...
Gourmet Meals for Family, Relatives & Friends Page  Source: Homescan®, a service of The Nielsen Company – PanelViews Surve...
Households Using Multiple Sources for Meal Preparation & Meal Ideas Page  Source: Homescan®, a service of The Nielsen Comp...
Food Network Viewing Audience has Grown Threefold Page  Source: Nielsen National People Meter Panel,  a service of The Nie...
Top Chef Audience Growing too! Page  Source: Nielsen National People Meter Panel,  a service of The Nielsen Company –  Ave...
Smaller Market for Specialty Stores, Products & Magazines Page  Source: Homescan®, a service of The Nielsen Company – Pane...
Educational Opportunities – Are Current Methods Keeping More From Attending?  Page  Source: Homescan®, a service of The Ni...
Page  Other web site videos from:  Lunds & Byerly’s, Harris Teeter, & Wegmans …
Nearly 22 Million Households Claim to Have A Gourmet Cook <ul><li>While gourmet cooks can be found in many household types...
Page  Gourmet Cooks: Shopping & Buying Behaviors
Gourmet Cook Households are Frequent Shoppers Page  Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008
Gourmet Cooks are Big Spenders:  Outspend Other Households in Most  Traditional Retail Channels Page  Source: Homescan®, a...
Gourmet Cooks Outspend Other Households in Many  Other Retail Channels Page  Source: Homescan®, a service of The Nielsen C...
Gourmet Cooks Outspend Other Households in Most  Major Departments Page  Source: Homescan®, a service of The Nielsen Compa...
Gourmet Cooks Significantly Outspend Other Households in # of  Product Categories Page  Source: Homescan®, a service of Th...
Other Categories With at Least a 20% Differential in Favor of Gourmet Cooks Page  Source: Homescan®, a service of The Niel...
But Wait, There are More Categories Where Gourmet Cook Households Outspend  Page  Source: Homescan®, a service of The Niel...
Page  Pain at the Pump! Gas Price Monitor
Page  Source: Homescan® Total ShopperView, a service of The Nielsen Company―Total US―52 weeks ending 06/28/2008; Average W...
Changing Behaviors as Economy Weakens Page  2Q08 vs 2Q07 Percent Change Source: Homescan®, a service of The Nielsen Compan...
Low Income Taking More Drastic Trip Cuts Page  2Q08 vs 2Q07 Percent Change Source: Homescan®, a service of The Nielsen Com...
Retailers Performing Well In Tough Economy <ul><li>Costco   July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s ...
Retailers Performing Well In Tough Economy <ul><li>Costco   July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s ...
Retailers Performing Well In Tough Economy <ul><li>Costco   July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s ...
Retailers Performing Well In Tough Economy <ul><li>Costco   July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s ...
Other Retailers Struggling <ul><li>Gelson’s Markets  …”rising costs for food & fuel “may have caused some customers to mak...
<ul><li>Circuit City  1 st  qtr sales off 7.4%, comp- store down 11.3% </li></ul><ul><li>Williams-Sonoma  1 st  qtr total ...
Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page  78% combining shopping...
Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page  78% combining shopping...
Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page  78% combining shopping...
Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page  78% combining shopping...
<ul><li>“ HEB’s Central Market Goes Low with Free Organic Milk, Other Discounts … upscale fresh format for foodies is drop...
More U.S. Households Turning to Club Stores & Internet; Carpooling & Public Transportation Helping Few Page  Nielsen Homes...
More U.S. Households Turning to Club Stores & Internet; Carpooling & Public Transportation Helping Few Page  Nielsen Homes...
Page  Summary & Closing Thoughts
2008 & 2009 Will Be Challenging  <ul><li>Record high gas prices, food & beverage inflation, along with declining consumer ...
22 Million Households w/Gourmet Cook  <ul><li>Attractive demographics & shopping behaviors  </li></ul><ul><li>Big spenders...
How to Attract & Stay Current w/Gourmet Cooks   <ul><li>Having the right assortment is paramount </li></ul><ul><ul><li>Loc...
How to Attract & Stay Current w/Gourmet Cooks   <ul><li>Gourmet Cook households not immune to high gas prices & more likel...
How to Attract & Stay Current w/Gourmet Cooks   <ul><li>Now more than ever, you need to be current on gourmet cook shopper...
For daily news and the latest studies, reports, and whitepapers visit www.nielsenwire.com Thank you! [email_address]
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Gourmet Cooks: Cooking Up Retailer Opportunities

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  • In a survey fielded among nearly 27,000 Nielsen Homescan consumer panel homes in March of 2008, we find about 19% of households claiming to have a gourmet cook in their home. At a time when consumers are dealing with high gas prices and inflation across store shelves, households with a gourmet cook have distinct shopping and buying behaviors making them an attractive target for food and non-food retailers who are looking to maximize their sales in a soft economy.
  • Gourmet Cooks: Cooking Up Retailer Opportunities

    1. 1. Gourmet Cooks: Cooking Up Retailer Opportunities Todd Hale, SVP Consumer & Shopper Insights August 22, 2008 as seen on: nielsenwire.com
    2. 2. Todd Hale SVP, Consumer & Shopper Insights Nielsen Consumer Panel Services <ul><ul><li>30 years of experience in the area of consumer panel analysis </li></ul></ul><ul><ul><li>24 years at Nielsen in various marketing & sales management positions </li></ul></ul><ul><ul><li>Involved in the development of innovative consumer panel applications for both manufacturers & retailers </li></ul></ul><ul><ul><li>Prepares topical presentations using consumer shopping/buying behavior & attitudes to provide insight to facilitate brand, category, & retail sales growth </li></ul></ul><ul><ul><li>Numerous speaking engagements each year @ client & industry events </li></ul></ul><ul><ul><li>MBA & BA in Business from Wright State University </li></ul></ul>Page
    3. 3. <ul><li>Economic Outlook </li></ul><ul><li>U.S. Retail Trends </li></ul><ul><li>Gourmet Meal Habits </li></ul><ul><li>Gourmet Cooks: Shopping & Buying Behaviors </li></ul><ul><li>Gas Price Impact </li></ul><ul><li>Summary & Closing Thoughts </li></ul>Page Agenda
    4. 4. U.S. Economic Outlook: How Rocky Is The Road? Page Page
    5. 5. The Answer Is…..….Pretty Rocky <ul><li>- Minutes of the Federal Open Market Committee, June 24-25, 2008 </li></ul>Page “… economic activity has remained soft in recent months. Manufacturing activity had deteriorated , business investment in equipment appeared to have moved down , and residential construction had continued its steep descent . Labor market conditions had weakened further, and consumer sentiment was at historical lows , but despite these developments, consumer spending appeared resilient . Core consumer price inflation had been stable over recent months, but headline inflation had remained elevated ...”
    6. 6. Forces at Work: Consumer Wallet Pressures Page <ul><li>Personal debt servicing </li></ul><ul><li>Home energy </li></ul><ul><li>Transportation </li></ul><ul><li>Food </li></ul><ul><li>Healthcare </li></ul><ul><li>Education </li></ul><ul><li>Home & stock portfolios losing value </li></ul><ul><li>Tighter credit </li></ul><ul><li>Flat income in existing jobs </li></ul><ul><li>Unemployment rate increasing </li></ul><ul><li>Weak dollar </li></ul>Average U.S. Consumers Getting Squeezed Lower Spending Power Falling Wealth, Income & Credit Rising Costs Rising Living, Household Expenses
    7. 7. Overall Cost of Living Rising Sharply Consumers Can Not Keep Up With Necessities Page Source: U.S. Department of Labor Statistics (Consumer Price Index; U.S. City Average); USDA, NAR, BLS Fuel Oil Gallon Gasoline Gallon Bread pound Ground Beef pound Chicken pound Eggs dozen Milk half gallon 3% Wages Housing - 8% 12 Month Percentage Increase, Selected Items (March 2007 vs. March 2008) 48% 35% 27% 16% 10% 13% 7%
    8. 8. Energy Needs Becoming the #1 Household Spending Item Page Annual household spend fueling up; assumes 12,000 per year, average 20 miles per gallon Dept of Energy—2 car households—approx 60% Consumer Expenditure Survey <ul><li>Household Spending: </li></ul><ul><ul><li>Food $6,111 </li></ul></ul><ul><ul><ul><li>At Home $3,417 </li></ul></ul></ul><ul><ul><ul><li>Away From Home $2,694 </li></ul></ul></ul><ul><ul><li>Gas – only $4,921 </li></ul></ul><ul><ul><li>Health Care $2,766 </li></ul></ul><ul><ul><li>Entertainment $2,376 </li></ul></ul><ul><ul><li>Apparel & Services $1,874 </li></ul></ul>
    9. 9. Global Demand Pushes Gas to $4/Gallon; Can $5/Gallon Be Far Off? Page Dept of Energy
    10. 10. Declining Consumer Confidence (Index 100 = 1985 Confidence Level) Page March 2008 January 2008 January 2007 January 2006 February 2008 107 92 110 94 87 69 76 58 65 48 Source: The Conference Board Consumer Confidence Index Consumer Expectations Index Worst since 1992 Apr 2008 May 2008 45 57 62 50
    11. 11. Forces at Work: CPG Margin Pressures Page <ul><li>Commodities at all time highs </li></ul><ul><ul><li>Barley (+47%) Corn (+59%) Wheat (+63%) </li></ul></ul><ul><li>Fuel Prices at record levels </li></ul><ul><ul><li>transportation of goods plus pressure on the consumers wallet </li></ul></ul><ul><li>Pricing Decisions </li></ul><ul><li>Value Retail Expansion—competitors must hold/lower prices in their path </li></ul><ul><li>Growth of private label </li></ul><ul><li>Discount food retailers </li></ul>Margin Pressures on both CPG Manufacturers & Retailers! Retail Prices Weaker U.S. Dollar Wal-Mart growth Discount player emergence Rising Commodity Prices Ingredient Cost Transportation Cost Packaging Cost
    12. 12. So, Tough Times for Growth & How Important Are Value, Variety & Convenience to You? <ul><li>How are you equipped to compete against Value, Variety or Convenience? </li></ul><ul><li>Are you providing Value, Variety & Convenient solutions to category consumers & retail shoppers? </li></ul><ul><li>An integral part of these themes is innovation </li></ul>Page
    13. 13. Page U.S. Retailing Trends
    14. 14. Value & Convenience Winning As Evidenced By Increased Store Count Page U.S. Store counts Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
    15. 15. Some Big Players Going w/Smaller Grocery Format Page <ul><li>Half the Size of a Neighborhood Market </li></ul><ul><li>Recent Trademarked Names for Possible Private Label </li></ul><ul><ul><li>“ City Thyme” & “Field & Vine” </li></ul></ul>
    16. 16. Wal-Mart & Target Leading Store Expansion versus Major Grocers Page *Includes Division 1, Supercenters, Neighborhood Markets & Sam’s Club U.S. Store counts Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
    17. 17. Niche Grocery Store Count Growth From Natural/Gourmet & Deep Discounters Page U.S. Store counts Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
    18. 18. Rapid Store Growth From Leading Drug Chains; Warehouse Stores Growing too Page U.S. Store counts Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
    19. 19. Some Major Gourmet Food Retailers Page 22 locations in the Twin Cities area Source: Company Websites 15 California locations 16 stores conveniently located throughout Manhattan 10 locations in Connecticut, Manhattan, Scarsdale, Maryland, D.C., & Virginia 14 retail stores and cafes in New York, Washington, D.C., Napa Valley, Charlotte, and Kansas City 5 St. Louis retail stores 18 locations in Los Angeles Area
    20. 20. Nugget Markets Page “ a family-owned business …since 1926, …started in Woodland, California … now with seven Nugget Market locations in the greater Sacramento area and two more on the way” Source: Company Website
    21. 21. Nugget Markets Page Specialty Cheese Indulgent Chocolates Fresh Flowers & Produce Prepared Foods Bakery In-store Cafe
    22. 22. Nugget Markets – Homepage on Website Page “ Low Prices: With all of our focus on quality, it’s sometimes hard for our guests to believe that we also offer the lowest prices. But it’s true — we offer the area’s best prices from a full-service grocery store. Don’t believe us? … That’s why we invented the Price Challenge , so our guests can see for themselves that shopping at Nugget will save them money” Source: Company Website
    23. 23. Shopping Behavior Trends <ul><li>Retailers can grow their sales by: </li></ul><ul><ul><li>Increasing their shopper base </li></ul></ul><ul><ul><li>Driving shopping frequency </li></ul></ul><ul><ul><li>Building baskets </li></ul></ul><ul><li>Leveraging categories & brands that impact one or more of these components </li></ul><ul><li>Driving “need state” trip opportunities </li></ul><ul><ul><li>Health & wellness </li></ul></ul><ul><ul><li>Meal occasions </li></ul></ul><ul><ul><li>Large versus small trips </li></ul></ul><ul><ul><li>Time-starved consumers </li></ul></ul>Page Source: Homescan®, a service of The Nielsen Company
    24. 24. Value Winning As Evidenced By Consumer Acceptance Page *Includes Kmart, Target & Wal-Mart Supercenters Benefits from new store openings % household penetration Source: Homescan®, a service of The Nielsen Company
    25. 25. Value Channels Grabbing Trips Page Grocery & Mass trips continue to drop *Includes Kmart, Target & Wal-Mart Supercenters Trips per household Source: Homescan®, a service of The Nielsen Company
    26. 26. Value Retailing Driving Price Compression Page *Includes Kmart, Target & Wal-Mart Supercenters Average $ basket ring —t otal expenditures Source: Homescan®, a service of The Nielsen Company
    27. 27. Page Gourmet Meal Habits of U.S. Households
    28. 28. 1/3 rd of U.S. Households Occasionally or Frequently Consume a Gourmet Meal Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    29. 29. Most Gourmet Meals Eaten @ Restaurant, but Sizeable At-Home Market Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    30. 30. Gourmet Meals Prepared in One of Five Households @ Least Monthly Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    31. 31. Gourmet Meals for Family, Relatives & Friends Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    32. 32. Households Using Multiple Sources for Meal Preparation & Meal Ideas Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    33. 33. Food Network Viewing Audience has Grown Threefold Page Source: Nielsen National People Meter Panel, a service of The Nielsen Company – Average TV viewership in the U.S.
    34. 34. Top Chef Audience Growing too! Page Source: Nielsen National People Meter Panel, a service of The Nielsen Company – Average TV viewership in the U.S.
    35. 35. Smaller Market for Specialty Stores, Products & Magazines Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    36. 36. Educational Opportunities – Are Current Methods Keeping More From Attending? Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    37. 37. Page Other web site videos from: Lunds & Byerly’s, Harris Teeter, & Wegmans …
    38. 38. Nearly 22 Million Households Claim to Have A Gourmet Cook <ul><li>While gourmet cooks can be found in many household types, they have unique & attractive demographics: </li></ul><ul><ul><li>disproportionate percentage have incomes of $100,000 + </li></ul></ul><ul><ul><li>tendency to live in large cosmopolitan centers or in affluent suburban areas </li></ul></ul><ul><ul><li>household head occupation: professional or managerial </li></ul></ul>Page Source: Homescan®, a service of The Nielsen Company – PanelViews Survey – March 2008
    39. 39. Page Gourmet Cooks: Shopping & Buying Behaviors
    40. 40. Gourmet Cook Households are Frequent Shoppers Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008
    41. 41. Gourmet Cooks are Big Spenders: Outspend Other Households in Most Traditional Retail Channels Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – all products
    42. 42. Gourmet Cooks Outspend Other Households in Many Other Retail Channels Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – all products
    43. 43. Gourmet Cooks Outspend Other Households in Most Major Departments Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – UPC-coded products
    44. 44. Gourmet Cooks Significantly Outspend Other Households in # of Product Categories Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – UPC-coded products
    45. 45. Other Categories With at Least a 20% Differential in Favor of Gourmet Cooks Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – UPC-coded products
    46. 46. But Wait, There are More Categories Where Gourmet Cook Households Outspend Page Source: Homescan®, a service of The Nielsen Company – 52 w/e 5/31/2008 – UPC-coded products
    47. 47. Page Pain at the Pump! Gas Price Monitor
    48. 48. Page Source: Homescan® Total ShopperView, a service of The Nielsen Company―Total US―52 weeks ending 06/28/2008; Average Weekly Gas Prices http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html Household-based Measures of Gas Buying As Prices Increase, Consumers Have Less to Spend & Must Make Trade-Offs Last week of November & December meal & holiday shopping
    49. 49. Changing Behaviors as Economy Weakens Page 2Q08 vs 2Q07 Percent Change Source: Homescan®, a service of The Nielsen Company * Excludes gas only trips Trip Generators Trip Optimizers Trip Avoiders
    50. 50. Low Income Taking More Drastic Trip Cuts Page 2Q08 vs 2Q07 Percent Change Source: Homescan®, a service of The Nielsen Company Shopping Trips By Hhld Income * Excludes gas only trips At Risk Affluent driving “value” trips Trip Generators Trip Optimizers Trip Avoiders
    51. 51. Retailers Performing Well In Tough Economy <ul><li>Costco July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s July same-store sales up 16.7%, excluding gasoline, same-store up 7% </li></ul><ul><li>Dollar Tree posted 12.5% increase in sales during fiscal 2nd qtr, comp-store up 6.5% </li></ul><ul><li>Kroger 1 st qtr sales up 11.5%, identical supermarket sales up 9.2% with fuel & 5.8% without </li></ul><ul><li>Family Dollar July sales rose 7.2%, same-store up 4.6% </li></ul><ul><li>Walgreen Co. July sales up 10.7%, same-store up 4.1% </li></ul><ul><li>Wal-Mart 2 nd qtr sales up 10.1%, same-store up 4.5% </li></ul>Page Source: Industry e-newsletters & company web sites = Stock-up & Save Consumer Motivation
    52. 52. Retailers Performing Well In Tough Economy <ul><li>Costco July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s July same-store sales up 16.7%, excluding gasoline, same-store up 7% </li></ul><ul><li>Dollar Tree posted 12.5% increase in sales during fiscal 2nd qtr, comp-store up 6.5% </li></ul><ul><li>Kroger 1 st qtr sales up 11.5%, identical supermarket sales up 9.2% with fuel & 5.8% without </li></ul><ul><li>Family Dollar July sales rose 7.2%, same-store up 4.6% </li></ul><ul><li>Walgreen Co. July sales up 10.7%, same-store up 4.1% </li></ul><ul><li>Wal-Mart 2 nd qtr sales up 10.1%, same-store up 4.5% </li></ul>Page Source: Industry e-newsletters & company web sites = Value Seeking Consumer Motivation
    53. 53. Retailers Performing Well In Tough Economy <ul><li>Costco July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s July same-store sales up 16.7%, excluding gasoline, same-store up 7% </li></ul><ul><li>Dollar Tree posted 12.5% increase in sales during fiscal 2nd qtr, comp-store up 6.5% </li></ul><ul><li>Kroger 1 st qtr sales up 11.5%, identical supermarket sales up 9.2% with fuel & 5.8% without </li></ul><ul><li>Family Dollar July sales rose 7.2%, same-store up 4.6% </li></ul><ul><li>Walgreen Co. July sales up 10.7%, same-store up 4.1% </li></ul><ul><li>Wal-Mart 2 nd qtr sales up 10.1%, same-store up 4.5% </li></ul>Page Source: Industry e-newsletters & company web sites = Value & Convenience Consumer Motivation
    54. 54. Retailers Performing Well In Tough Economy <ul><li>Costco July sales rose 14%, same-store up 10% </li></ul><ul><li>BJ’s July same-store sales up 16.7%, excluding gasoline, same-store up 7% </li></ul><ul><li>Dollar Tree posted 12.5% increase in sales during fiscal 2nd qtr, comp-store up 6.5% </li></ul><ul><li>Kroger 1 st qtr sales up 11.5%, identical supermarket sales up 9.2% with fuel & 5.8% without </li></ul><ul><li>Family Dollar July sales rose 7.2%, same-store up 4.6% </li></ul><ul><li>Walgreen Co. July sales up 10.7%, same-store up 4.1% </li></ul><ul><li>Wal-Mart 2 nd qtr sales up 10.1%, same-store up 4.5% </li></ul>Page Source: Industry e-newsletters & company web sites = Value & 1-Stop Shop Consumer Motivation
    55. 55. Other Retailers Struggling <ul><li>Gelson’s Markets …”rising costs for food & fuel “may have caused some customers to make some or all of their purchases from our competitors,” 2 nd qtr same-store sales declined 2.7%” </li></ul><ul><li>Target Corp. July sales up 4.7%, same-store off 1.2% </li></ul><ul><li>Safeway’s 2 nd qtr identical-store, excluding fuel, off 0.3% </li></ul><ul><li>“ Whole Foods Market weak 3 rd qtr sales … worst comp-store sales gains in 28-year history — up 2.6% — predicted comp-sales for the 4 th qtr would rise 1.5%” </li></ul>Page * Source: Supermarket News Source: Industry e-newsletters & company web sites High or higher end retailers not immune
    56. 56. <ul><li>Circuit City 1 st qtr sales off 7.4%, comp- store down 11.3% </li></ul><ul><li>Williams-Sonoma 1 st qtr total comp-sales off 9% </li></ul><ul><li>Home Depot sales for their 1 st qtr were off 3.4%, comp- store off 6.5% </li></ul><ul><li>Barnes & Noble 1 st qtr sales up 1.1%, comp-store off 1.5% </li></ul><ul><li>Macy’s 1 st qtr sales off 2.9%, same-store off 2.6% </li></ul>Softness in Alternative & Specialty Channels Page Source: Industry e-newsletters & company web sites Anyone care to forecast the holiday season for these retailers?
    57. 57. Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page 78% combining shopping trips & errands (+ 10 pts from YAGO), 52% eating out less (+ 14 pts), 51% staying home more often (+ 12 pts) & 63% of U.S. consumers are reducing spending (+ 18 pts)! Nielsen Homescan Gas Impact Study
    58. 58. Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page 78% combining shopping trips & errands (+ 10 pts from YAGO), 52% eating out less (+ 14 pts), 51% staying home more often (+ 12 pts) & 63% of U.S. consumers are reducing spending (+ 18 pts)! Nielsen Homescan Gas Impact Study Similar Responses Among Gourmet Cook Households
    59. 59. Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page 78% combining shopping trips & errands (+ 10 pts from YAGO), 52% eating out less (+ 14 pts), 51% staying home more often (+ 12 pts) & 63% of U.S. consumers are reducing spending (+ 18 pts)! Nielsen Homescan Gas Impact Study Saving Money in What & How they Buy & Where They Shop Impact higher gas prices had on driving & spending habits? Check all Jun/Jul ‘05 Jun/Jul ‘06 Jun ‘ 07 Jun ‘ 08 Buy less expensive grocery brands 17% 22% 19% 35% Use more coupons 20% 24% 21% 32% Shop more @ Supercenters 22% 26% 23% 28% Buy Larger, Economy Size 10% 11% 10% 16%
    60. 60. Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels! Page 78% combining shopping trips & errands (+ 10 pts from YAGO), 52% eating out less (+ 14 pts), 51% staying home more often (+ 12 pts) & 63% of U.S. consumers are reducing spending (+ 18 pts)! Nielsen Homescan Gas Impact Study Saving Money in What & How they Buy & Where They Shop Gourmet Cook households 27% more likely to buy larger, economy size; 13% more likely to use coupons Impact higher gas prices had on driving & spending habits? Check all Jun/Jul ‘05 Jun/Jul ‘06 Jun ‘ 07 Jun ‘ 08 Buy less expensive grocery brands 17% 22% 19% 35% Use more coupons 20% 24% 21% 32% Shop more @ Supercenters 22% 26% 23% 28% Buy Larger, Economy Size 10% 11% 10% 16%
    61. 61. <ul><li>“ HEB’s Central Market Goes Low with Free Organic Milk, Other Discounts … upscale fresh format for foodies is dropping coupons with $10 off a $50 order” </li></ul>> Value Importance for Upscale Grocers Page Source: Progressive Grocer
    62. 62. More U.S. Households Turning to Club Stores & Internet; Carpooling & Public Transportation Helping Few Page Nielsen Homescan Surveys Impact higher gas prices had on driving & spending habits? Check all Jun/Jul ‘05 Jun/Jul ‘06 Jun ‘ 07 Jun ‘ 08 Use lower grade gas 16% 18% 14% 14% Shop more @ Warehouse Clubs 9% 10% 10% 13% Shop more on Internet 5% 9% 9% 11% Carpool more often 5% 7% Use Public Transportation more 3% 4% 3% 4%
    63. 63. More U.S. Households Turning to Club Stores & Internet; Carpooling & Public Transportation Helping Few Page Nielsen Homescan Surveys Gourmet Cook households 31% more likely to shop club stores ; 26% more likely to shop internet; 49% more likely to use public transportation Impact higher gas prices had on driving & spending habits? Check all Jun/Jul ‘05 Jun/Jul ‘06 Jun ‘ 07 Jun ‘ 08 Use lower grade gas 16% 18% 14% 14% Shop more @ Warehouse Clubs 9% 10% 10% 13% Shop more on Internet 5% 9% 9% 11% Carpool more often 5% 7% Use Public Transportation more 3% 4% 3% 4%
    64. 64. Page Summary & Closing Thoughts
    65. 65. 2008 & 2009 Will Be Challenging <ul><li>Record high gas prices, food & beverage inflation, along with declining consumer confidence will cause consumers to do more of what they have been doing: </li></ul><ul><ul><li>Combine shopping trips </li></ul></ul><ul><ul><li>Eat more meals at home & do more at-home entertaining </li></ul></ul><ul><ul><li>Seek the right mix of value, variety, & convenience </li></ul></ul><ul><ul><li>BUT AT ACCELERATED LEVELS </li></ul></ul><ul><ul><li>SO WHAT ARE YOU DOING DIFFERENTLY? </li></ul></ul>Page
    66. 66. 22 Million Households w/Gourmet Cook <ul><li>Attractive demographics & shopping behaviors </li></ul><ul><li>Big spenders in # of traditional & non-traditional retail channels </li></ul><ul><li>Big spenders in many departments & categories </li></ul>Page
    67. 67. How to Attract & Stay Current w/Gourmet Cooks <ul><li>Having the right assortment is paramount </li></ul><ul><ul><li>Local sourcing on-trend with freshness & enables better value </li></ul></ul><ul><li>Information hungry, but fragmented communication channels </li></ul><ul><ul><li>Magazines, cook books, cooking shows & the internet are great vehicles </li></ul></ul><ul><ul><li>On-line communications very prevalent </li></ul></ul><ul><ul><ul><li>Must be current </li></ul></ul></ul><ul><ul><ul><li>Leverage video capabilities & social networking </li></ul></ul></ul>Page
    68. 68. How to Attract & Stay Current w/Gourmet Cooks <ul><li>Gourmet Cook households not immune to high gas prices & more likely to: </li></ul><ul><ul><li>Buy larger economy-sized products </li></ul></ul><ul><ul><li>Shop club stores & the internet </li></ul></ul><ul><ul><li>Use coupons </li></ul></ul><ul><li>Value Messaging Matters More Than Ever! </li></ul><ul><ul><li>Value Pricing </li></ul></ul><ul><ul><li>Value Meals </li></ul></ul><ul><ul><li>How about Leftover Meal Management Solutions? </li></ul></ul><ul><li>While this Holiday season will likely be soft, consumers do show a willingness to spend even when gas prices are high! </li></ul>Page
    69. 69. How to Attract & Stay Current w/Gourmet Cooks <ul><li>Now more than ever, you need to be current on gourmet cook shopper trends to understand: </li></ul><ul><ul><li>base needs & interests </li></ul></ul><ul><ul><li>shifting shopping & buying patterns </li></ul></ul><ul><ul><li>who they are & where they can be found </li></ul></ul><ul><li>Nielsen has tools to link gourmet cook demographics with media habits, leisure time activities & stores shopped to enable targeted messages, assortment & promotions </li></ul>Page
    70. 70. For daily news and the latest studies, reports, and whitepapers visit www.nielsenwire.com Thank you! [email_address]

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