The document provides an agenda and background information for developing the AW15 strategy for pans at Tesco. Key points from the document include: pans accounted for 33% of category sales and 30% of profits in AW14; intake and CRS margins for pans were lower than the category average; closing stock levels for pans were high at 130 weeks of coverage; and opportunities exist to grow sales and profits by improving margins, reducing stock levels, and increasing the pans option count in line with its sales performance.

1. Sapphire Wallace
AW15 Strategy Pans

2. Agenda
- AW14 performance summary
- Market data (Dunnhumby/GfK/Conlumino): what position are we in the market, who is market leading and what are the
trends in market data
- Tesco customer data (Dunnhumby/GfK/Conlumino): what are our customers buying into and what key factors are driving
their decisions
- AW14 Comp Shop: identify market trends, gaps and opportunities
- SWOT: driven from AW14 lessons learnt
- AW15 budgets
- AW15 9 Box strategy
- AW15 visual range matrix
- AW15 trade plan
- Marketing

3. AW14 Lessons Learnt - Pans
Summary of data:
Sales:
- TY £9m cash sales (+2% vs LY £8.82m cash sales)
- Ave £ sales by sku £450k based on 20 week season
Margin:
- Intake margin 43%, £ margin £3.2m (total cost ex MD £4.3m)
- CRS margin 38%, CRS £ margin £2.9m (total cost inc. MD £4.7m)
- Total markdown cost £375k
- Ave £ profit/sku £142.5k (inc. MD)
- Would want to work out CGM margin taking into account income and expenditure of department to get to actual profit achieved.
Stock:
- Based on closing stock £ and 20 week season for AW14 130.0 weeks cover
Key lessons learnt:
• Key profit driver for category: Pans & Tableware subgroups account for 56% £ sales mix, 59% £ profit mix only 25% option mix - Pans has the highest ave. profit /sku.
• Overperforming vs option count: Pans delivered 33% category £ sales mix, 30% of the profit mix with only 11% of the option mix. Need to reduce option count on low
return areas (Candles/Kids Bedding/Kids Furniture) redistribute to Pans/Tableware/Storage to deliver more profit, butmaintain strong customer offer across
categories.
• Growth area: +2% YOY - other areas in decline such as Kids Bedding (could be space or distribution change impact).
• Need to improve margin to deliver more profit: when compare to Tableware £ sales and profit mix should be delivering more.
• Review RSPs/negotiate costs: markdown % total cost relatively low - need to review cost prices by line and check retail prices are in line with market.
• Reduce closing stock: 130.0 weeks cover too high – need to understand if this is continuity stock or disc CAYG which will effect next season’s CRS margin.
More information required to understand if the BTA has been met – high closing stock could suggest that the area has missed forecast that has been bought to, however
this could be continuity stock rolling into the next season or major launch SS15 building stocks.
Departme
nt
TY Cash £k
Sale Mix TY
%
TY Cash £k
(ex VAT)
LY Cash £k
Sale Mix LY
%
%Year
Closing
Stock £k
Intake
Margin
Intake
Margin £k
Total Cost
(ex. MD)
£k
CRS
Margin
CRS
Margin £k
% Category
Profit Mix
Total Cost
(inc.
MD)£k
Total MD
cost £k
MD %
Sales
Number of
Options
Category
Option %
Mix
Ave £ Sales
by Sku £k
Ave Profit
by Sku £k
Ave Weeks
Sales
£k(based on
season
20wks)
Closing Stock
Cover (based
on 20 week
season)
Pans £9,000 33% £7,500 £8,820 34% 2% 58,500 43% £3,225 £4,275 38% £2,850 30% £4,650 £375 4.20% 20 11% £450 £142.50 £450 130.0
Tableware £6,250 23% £5,208 £5,081.30 19% 23% 81,250 57% £2,969 £2,240 53% £2,760 29% £2,448 £208 3% 25 14% £250 £110 £313 260.0
Candles £2,000 7% £1,667 £1,504 6% 33% 32,000 55% £917 £750 54% £900 9% £767 £17 1% 30 17% £67 £30 £100 320.0
Kids
Bedding
£1,500 6% £1,250 £1,765 7% -15% 15,000 64% £800 £450 60% £750 8% £500 £50 3% 20 11% £75 £38 £75 200.0
Soft
Furnishing
s
£1,500 6% £1,250 £1,304 5% 15% 37,500 66% £825 £425 58% £725 8% £525 £100 7% 15 8% £100 £48 £75 500.0
Kids
Furniture
£750 3% £625 £1,364 5% -45% 4,500 36% £225 £400 38% £238 2% £388 -£13 -2% 50 28% £15 £5 £38 120.0
Storage £6,000 22% £5,000 £6,390 24% -6.1% 30,000 26% £1,300 £3,700 26.00% £1,300 14% £3,700 £0 0% 20 11% £300 £65 £300 100.0
TOTAL £27,000 100% £22,500 £26,228 100% 3% £258,750 £9,523 180

4. Financial Targets – Profit & Market Share Financial Targets – Sales Growth Customer & Competitors
- AW14 store & online profit – vs budget/ forecast/ LY.
- Anything vs LY that has had a positive/negative impact on profit
e.g. cost price increases/decreases?
- What is primarily driving the profit?– review profit densities by
sku and range.
- CGM margin: need to know pans income/expenditure – review
vs LY.
- AW14 markdown cost vs budget/forecast/LY.
- Retail prices – ASP vs LY?
- AW14 store/online performance split: growth in-store
and/or online?
- AW14 store/online performance vs budget/forecast/LY
- SOS performance store /online - variances SOS in skus/space
etc.
- LFL performance review.
- Run rates across the season - was our forecast accurate?
- Review promo & event sales – how did these perform and
what percentage of the total sales do these account for?
- Are there any trends in the market across this season/gaps vs
competitors ranges in terms of new brands and innovation?
- Customer focus group feedback on range/quality.
- What were the reviews online/Bazaar Voice – is there a trend
in customer feedback on design/quality that we need to
review?
Product & Quality Sourcing & Supply Selling Price
- Line level detail of 20 skus – G/B/B percentage sales mix
(review vs LY), top performing skus/bottom performing skus
sales mix and vs planned ROS.
- Percentage sales mix by product type (fry
pan/saucepan/stockpot etc.).
- Percentage sales mix by material (non-stick, stainless steel,
copper etc.) and brand.
- Brands: do we have the right brands for our customer? What
are our competitors doing?
- Product specifications/quality review by range – are these in
line with the market?
- Packaging: does this make a strong statement by range and
demonstrate the G/B/B hierarchy?
- Supplier performance – service level review .
- Availability by sku.
- T/O by supplier – where has business grown YOY?
- Were joint buy opportunities with CE maximised?
- Stock: were my stock levels more/less than last year?
- Sell throughs by line – track performance vs buy.
- How do these compare to the rest of the market?
- RSP hierarchy clear for customers?
- Channel prices: store vs online?
Marketing & Promotions Multichannel Space & Timings
- Promotions & events: how have these performed vs
budget/forecast/last year?
- POS – did this have enough presence? Did it shout about
WOW prices and educate the customer on product end
use/specifications/guarantees?
- Homebook: sales density of pans pages? What effect did this
have on the sales?
- Store execution vs plan – was the VM practical for stores to
execute?
- Direct range: underperforming/overperforming lines vs
plan.
- Review demand/page views/orders.
- Is the customer journey clear?
- What are customers saying about the products online?
- How does our website compare to competitors for this
area?
- Space – review space and distribution stores vs last year –
how has this changed?
- Same number of shelves/products per mod vs last year?
- Performance vs store type – Extra/Supers/Metros etc?
- Consumables range – review performance, are the right
products in this range from a customer and commercial
perspective?
- Facings – were enough facings given to overperforming lines?
AW14 Lessons Learnt – Further Information

5. Market Data – Overview of the Market
Conlumino September 2014:
- Cooking and baking market in steady growth – forecast to grow 9.2% by 2018.
- Austerity measures led to increase in home cooking, huge growth area for retailers.
- Pans market £532.1m (49.8% total cooking and baking market) – forecasted growth 8.8% by 2018.
- Pans growth fallen behind baking as largely replacement-driven demand – housing market has affected new purchase demand. However this should pick up by
2018 as the economy continues to improve.
- Grocers 23.7% market share, specialist market share growing (second to grocers).
- Online purchases to represent 21.5% market by 2018: growth opportunity for retailers. - pans has the highest penetration rate online.
- We are market leaders in cooking and baking with share of 7.2% but this has decreased by 0.2% since 2012.
- Dunelm & Asda key competitors in the market but also need to review specialists such as Lakeland who are seeing growth (mainly due to baking trends in line
with social media).
GfK Week 32 2014: (subject to subgroup attributes)
- YTD SV decline in growth of Pots and Pans market - Pressure Cooker market seen overall growth across Leaderpanel but not reflected in Tesco SV or market
share YTD.
- YTD SVol decline in growth of Pots, Pans, Pressure Cooker markets – Tesco YTD SVol growth and market share also in decline.

6. Market Data – Tesco Customer
Conlumino September 2014:
- Key purchase drivers on pans: replacement and new look/design.
- Purchase considerations based on quality and price: investments therefore must be good quality and have durability.
- High penetration female customer base 18-44 – mid-high affluence.
- High penetration in the frying pan sub category.
- Under indexing on the male customer base, older and low affluence.
Dunnhumby Who Shops My Range: 52 weeks 30 Sept 2013 – 28 Sept 2014
- Overall cookshop high penetration in older adults/pensioners, very high/medium affluence.
- Pans high penetration in young adults/young families/older families of mid-high affluence.

7. AW15 PANS
SWOT & TRADER DRIVERS
Strengths
w Pans 33% category £ sales +2% YOY (biggest cash area) - 30% category profit mix vs 11% option mix - potential to grow.
w Pans market £532.1m (49.8% total cooking & baking market) - forecasted to grow 8.8% by 2018. Tesco market leader in cooking & baking market
with 7.2 % share (outperforming total Tesco Homewares marketshare 4.6%).
w Pans market growth fallen behind baking due to decrease in new purchase demand (effect of housing market), but £ sales grown YOY.
Weaknesses
w Intake margin 43% CRS margin 38% - (category average intake margin 50%/CRS margin 47%).
w RSPs vs market/cost prices - impacting margin.
w Closing stock cover 130.0 weeks
Opportunities
w Grow option count in line with sales and profit mix - reduce option count in underperforming subgroups.
w Improve margin - negotiate cost prices and review RSPs vs market.
w Maximise online opportunity - online purchases to represent 21.5% cooking & baking market by 2018 (pans high penetration rate online). Use online
range to stretch ASP and breadth of range.
w Growth in Pressure Cooker market - opportunity to range.
w Underindexing on low affluence customer base - opportunity to grow entry price point range.
w New look/design is a key driver in pans purchase decision - ensure on top of emerging technology and demonstrate these clearly for the customer in
store through packaging/VM/POS.
w Key purchase decisions pans : quality & price - ensure price points offer great value for money and quality in line with the market. Shout about WOW
prices and F&Bs through educational packaging/POS.
w High penetration in Fry Pans: review option splits across range ensure maximising opportunity.
w Trade driving across range: key promotions such as Christmas Deals/Jan Sale/Pancake Day/additional space. Reactive trade driving across season.
Threats
w Dunelm & Asda marketshare of cooking & baking market - growth in specialists such as Lakeland.
w Space allocated to pans in Dunelm & Asda.
Lessons Learnt
w Pans key profit driver for category
w
w Margin below category average - driven by cost prices/RSPs not in line with the market
w High closing stock cover 130.0 weeks
w Opportunity for growth online in line with the market.
Key Initiatives/Trade Drivers
w Review category option splits by subgroup - Pans option count growth
w Margin improvement - review cost prices & RSPs
w Review RSPs vs market and cost prices negotiate to reduce costs
w Extend online range - improve customer journey
w Availabilty - improve on top 10 cash/unit lines
w Marketing - Homebook/packaging/POS: demonstrate clear G/B/B, quality and price. Link with food - Real Food/Sorted.
w Capitalise on key promotional periods for Pans - trade drive stock at end of season to reduce closing stock cover
Pans overperforming vs option count

8. AW15 Budget
Departme
nt
TY Cash £k
Sale Mix TY
%
TY Cash £k
(ex VAT)
LY Cash £k
Sale Mix LY
%
% Diff Year
Closing
Stock £k
Closing
Stock
Cover
Intake
Margin
% Diff LY
CRS
Margin
AW15
Number of
Options
Category
Option %
Mix
% Diff LY
Ave £ Sales
by Sku £k
Ave Profit
by Sku £k
Pans £18,346 49% £15,288 £9,000 33% 104% 15,000 14.7 48% 12% 43% 53 29% 165% £450 £142.50
Tableware £9,038 24% £7,532 £6,250 23% 45% 60% 5% 56% 47 26% 88% £250 £110
Candles £825 2% £687 £2,000 7% -59% 55% 0% 54% 16 9% -47% £67 £30
Kids
Bedding
£750 2% £625 £1,500 6% -50% 64% 0% 60% 13 7% -35% £75 £38
Soft
Furnishing
s
£1,077 3% £897 £1,500 6% -28% 66% 0% 58% 14 8% -7% £100 £48
Kids
Furniture
£58 0.2% £48 £750 3% -92% 36% 0% 38% 5 3% -90% £15 £5
Storage £7,385 20% £6,154 £6,000 22% 23% 29% 12% 29% 32 18% 60% £300 £65
TOTAL £37,478 100% £31,232 £27,000 100% 39% 180 100%
Grow market share 0.2%
Building Blocks: £9.4m growth
- Option count increase: £6m
- Promotions & events: £1.5m
- Availability on top lines: £1m
- Online range extension: £800k
- Marketing: Homebook, POS, food links: £500k
:

9. AW15 9 Box Strategy
Delivering Financial Targets – Profit & Market
Share
Delivering Financial Targets – Sales Growth Customer & Competitors
- AW15 margin grow to 48% (+12% YOY)
- Grow pans market share (declined 0.2% since 2012)
- Reduce cost prices and realign RSPs in line with market to
improve profit density.
- CIEs: focus on top 3 suppliers where T/O forecasted to
increased vs LY to improve rebate/marketing terms and
increase commercial income (e.g. Groupe Seb)
- Stock – OTB plan lower closing stock – trade drive
towards end of season.
- AW15 sales grow to £18.4m (+104% YOY)
- AW15 grow pans category option split to 29% (+165%
YOY) in line with profit mix and market space given to
subgroup.
- Key growth areas – core N/S range.
- Improve availability on top lines – never OOS.
- Promotions & events to deliver £x1.5m
- Focus on families (core customer base) – family cooking
themes.
- Try to reach out to underindexing customer base –
male/pensioner /price sensitive.
- Deliver clear G/B/B hierarchy across own brand and
branded ranges to create clear distinction for the
customer.
- Improve packaging styleguide – reflects G/B/B ranges.
Product & Quality Sourcing & Supply Selling Price
- EPP positioning: competitive prices – LFL quality against
market.
- Clear G/B/B range hierarchy – different materials offering
different technologies.
- Expand core Better range: great quality great prices.
- Tefal market leader in non-stick: shout about exclusive
range.
- Cut off product tail – bottom lines and increase options
within top 10 ranges (e.g. N/S aluminium additional
colour ways).
- Induction compatible.
- Benchmark Asda & Dunelm: market leaders. Track
Lakeland as increasing share.
- Challenge supply base to offer new
technologies/innovation in line with market (e.g. ceramic
coatings).
- Consolidate supply base to achieve better cost prices –
based on service levels, cost prices, quality (cut off tail).
- O/L core range - put in place 3 year plan with chosen
supplier to improve costs & rebate bands.
- CE – look at joint buy opportunities for range and promos.
- Price points reflect G/B/B hierarchy – customers
understand why they should pay more as quality
improves.
- Shout about EPP range: pre-priced sticker s/POS.
- Key driver for customer is price.
- Branded range – ensure prices are in line with the market.
Marketing & Promotions Multichannel Space & Timings
- Trade plan in place to deliver on key promotions/events.
– Christmas/Jan Sale/P14 Pancake Day.
- Work with suppliers to get funding for trade driving –
develop exclusive products to use in WOW 50% deals
online and in store events.
- Explore additional opportunities for incremental sales
linked with food trends – e.g. winter cooking stockpot end
(Lakeland benchmark).
- Educational POS – buying guide on material/pan use.
- VM reflects G/B/B hierarchy across range.
- POS to support great value for money hero lines.
- Continue to build relationship with press department to
secure space in key publications – shout about offers,
product F&Bs.
- Review underperforming online lines and clear through
stock to cut tail.
- Secure key branded ranges in line with competition.
- Clear customer journey/navigation.
- Top lines improved availability.
- Promotions on key online trading days such as Black
Friday/Cyber Monday/Payday Deals/Deal of the Week.
- Review cascade – ensure right products are cascaded
down the chain to increase profitability and maintain
customer choice.
- Review consummable range – ensure right range for our
customer.
- Ensure launching in line with rest of the market.

10. Visual Range MatrixBEST
8%
Vita Verde Ceramic Range (2
skus)
Professional Go Cook Copper
Range (2 skus)
BETTER+
32%
Tefal Adventure Range –
Exclusive (8 skus)
Pro Go Cook Hard Anodised
Range (3 skus)
Pro Go Cook Tri Ply S/S Range (3
skus) Pro Go Cook Copper Base (3 skus)
BETTER
49%
Tesco N/S Aluminium Range
(12 skus)
Tesco Carbon Steel Woks (2
skus) Tesco S/S Range (9 skus) Tesco Ceramic Fry Range (3 skus)
GOOD
11%
Basics Range (6 skus)

11. Range Matrix – OnlineBEST
Tefal
Initiative
Induction
Non-Stick
Range
Greenpan
Vita Verde
Ceramic
Pan Range
Professiona
l Go Cook
Copper
Range
Meyer
Prestige
Inspire
Range
Swift
Supreme
Range
Jamie
Oliver S/S
Range
Jamie
Oliver
Hard
Anodised
Range
Meyer
Circulon 2
Range
Prestige
Pressure
Cookers
Greenpan
Kyoto
Range
Brabantia
Range
BETTER+
Tefal
Minis
Range
Tefal
Adventure
Aluminium
Non-Stick
Range
Professiona
l Go Cook
Hard
Anodised
Range
Professiona
l Go Cook
Tri Ply
Stainless
Steel Range
Professiona
l Go Cook
Copper
Base Range
Prestige
branded
S/S range
Meyer
Select
Range
World of
Flavours
Ethnic
Range
Tefal
Signature/
Delight/Se
cure/Bistr
o Ranges
Ken Hom
Non-Stick
Ethnic
Range
Morphy
Richards
Range
BETTER
Tesco
Aluminiu
m Non-
Stick
Range
Black
Tesco
Carbon
Steel Wok
Range
Tesco S/S
Range
Tesco
White
Ceramic
Range
Tesco S/S
Pressure
Cooker
Range
Extended
Tesco
Non-Stick
Range –
additional
colours
Extended
Tesco
Stainless
Steel
Range –
specialist
seasonal
pans (e.g.
pasta
pan/fish
pan)
GOOD
Tesco
Basics
Carbon
Steel
Range
Key Brands
Tefal
Meyer
Jamie Oliver
Greenpan
Brabantia
World of Flavours
Ken Hom
Swift
Morphy Richards

12. AW15 Trade Plan - Pans
Q3 Q4
Sept Oct Nov Dec Jan Feb
Promotions
Save 1/3 Tesco Pan
End (run up to
Halloween/Fireworks
– winter stews/soups)
CHRISTMAS END
(COOKING – GREAT
DEALS FOR XMAS
MEAL)
JAN SALE – 50% OFF
(BRANDED DEALS –
TEFAL/MEYER ETC.)
P14 – PANCAKE DAY
(TEFAL SAVE 1/3
END)
Events
ETHNIC
COOKWARE
EVENT/RAMA
DAN
In-fixture
(RANGE
LAUNCH) –
PUSH ‘NEW’
START TRADING
THROUGH
UNDERPERFORMING
LINES
TRADING THROUGH
UNDERPERFORMING
LINES
TRADING THROUGH
UNDERPERFORMING
LINES
TRADING THROUGH
UNDERPERFORMING
LINES
TRADING THROUGH
UNDERPERFORMING
LINES
Online
PAYDAY
FRIDAY DEALS
BUY FULL
RANGE SAVE
£X
PAYDAY FRIDAY DEALS
BUY FULL RANGE SAVE
£X
PAYDAY FRIDAY DEALS
BLACK FRIDAY DEALS
CYBER MONDAY
DEALS
BUY FULL RANGE SAVE
£X
PAYDAY FRIDAY
DEALS
BUY FULL RANGE
SAVE £X
PAYDAY FRIDAY
DEALS
BUY FULL RANGE
SAVE £X
PAYDAY FRIDAY
DEALS
BUY FULL RANGE
SAVE £X

13. Marketing
Homebook
Shout about quality and price with guide to material and pan functions.
Link to recipes and trends within the season – e.g. trend for copper pans/ethnic cooking.
Highlight key brands we offer, exclusivity and price points – Tefal Adventure range.
Link to food trends for the season e.g. winter cooking such as soups or ethnic cooking such as paella with paella pan.
Packaging
To demonstrate a clear G/B/B hierarchy across the range and different material types to be easily identifiable (M&S what good
looks like).
Exclusive stickers
Entry products pre-priced
Made in UK stickers
Ensure induction-compatible clear
To use customer-friendly marketing copy e.g. ‘Easy to wash’ ‘Non scratch’

14. MarketingLink with food
Excite the customer with recipe ideas linking to our products through Real Food magazine, recipe cards and website.
Ensure our products are used and linked up with the Sorted food videos and Farm To Fork Cooking classes – channel through
social media links on Twitter/Pinterest etc.
Send tester sample to cook bloggers with high following.
POS
‘New’ and ‘WOW’ price pings to showcase great value for money products (price cards by range on fixture).
Educational POS bus stops explaining pan function and material type
Made in UK lines to be highlighted – product life stories online.
Extended range online POS