The Irish & UK
Grocery Retail
Landscape
David Berry – Commercial Director, Kantar Worldpanel
© Kantar Worldpanel
The Agenda
>
– Confidence Returning
– GB Key Trends
– ROI Key Trends
– ROI Retailer Evaluation
– Brand Growth Drivers
– Future Prediction
© Kantar Worldpanel
Source: KBC/ESRI Consumer Sentiment Index
© Kantar Worldpanel
What is the impact on retail sales?
Annual Change In CSO Retail Sales Index
Total Retail Sales
-1.8
-0.7
-0.5
-0.3
2011
2012
2013
-19.9
2009
2010
Source: CSO Retail Sales Index
© Kantar Worldpanel
How has grocery spend evolved?
0.6
0.8
2012
2013
-0.1
-2.8
-3.4
2009
2010
2011
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
What is the global context?
4
Q3 WE & USA Grocery Market Sales Performance
4
3
3
2
1
1
1
-1
-2
-3
-3
Source: Europanel, Q3 2013
© Kantar Worldpanel
How do GB & Ireland grocery markets compare?
– Market Size
– €9b
– £104b
– €5,500
– £3,900
– Market Growth
– 0.8%
– +3.7%
– Price Inflation
– 2.9%
– +2.5%
– Grocery Spend per HH
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
All GB macro categories continue to grow
Ambient Food
1.9
Fresh & Chilled
Toiletries
1.4
Ambient Food
Fresh & Chilled
1.3
Alcohol*
Household
0.7
Frozen Food
4.5
4.0
3.4
2.5
Frozen Food
-3.1
Healthcare
2.0
Alcohol*
-3.3
Household
1.9
Healthcare -7.0
Toiletries
1.7
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
GB retailer performance
26.8
26.2
14.7
14.4
15.0
15.0
11.3
10.9
5.4
5.2
4.3
4.5
2.7
3.3
2.4
2.8
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
10%
May-08
Jun-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
GB market growth vs. inflation
Recession
Recovery?
Double Dip / Austerity
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
12 we growth (Grocers RST)
12 we inflation
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
Growing Discounter strength
Long-Term Share of Till Roll Grocers
4
2
1
Aldi
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0
1993
Share (Expenditure)
3
Lidl
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
Long-Term Share of Till Roll Grocers
With a clear impact on multiples
34
32
30
28
26
22
20
18
16
14
12
10
8
6
4
2
Tesco
Asda
Sainsbury's
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0
1993
Share (Expenditure)
24
Morrisons Total
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
ROI retailer performance
27.8
26.2
24.1
23.9
19.8
20.1
5.9
7.1
5.7
6.4
5.5
5.2
Source: Kantar Worldpanel, data to 5th Jan 2014
© Kantar Worldpanel
Shopper switching patterns
€810k
€258k
€1m
€434k
€7.3m
€5.7m
€3.3m
€122k
€762k
€4.2m
€6m
€6.1m
€2.1m
€1.6m
€2.1m
© Kantar Worldpanel
07 Mar 10
05 Jan 14
13 Oct 13
15 Sep 13
21 Jul 13
26 May 13
31 Mar 13
03 Feb 13
09 Dec 12
14 Oct 12
19 Aug 12
Superquinn
24 Jun 12
29 Apr 12
04 Mar 12
08 Jan 12
13 Nov 11
18 Sep 11
24 Jul 11
29 May 11
SuperValu
03 Apr 11
06 Feb 11
12 Dec 10
17 Oct 10
22 Aug 10
27 Jun 10
02 May 10
Dunnes
10 Jan 10
15 Nov 09
20 Sep 09
26 Jul 09
31 May 09
05 Apr 09
08 Feb 09
Tesco
14 Dec 08
19 Oct 08
24 Aug 08
29 Jun 08
04 May 08
09 Mar 08
13 Jan 08
18 Nov 07
ROI retailer momentum
Total Discounters
30%
25%
20%
15%
10%
5%
0%
© Kantar Worldpanel
Retailer areas of focus
˃ Price Promise
˃ Online Escalation
˃ Convenience
˃ Strong Offers
˃ Superquinn transfer
˃ Always On multi-channel
˃ Own Brand development
˃ Building the brand
˃ Targeted activity
˃ Own Brand improvement
˃ Up-weighting spend
˃ Dublin opportunity
˃ Store expansion
˃ Range optimisation
© Kantar Worldpanel
ROI market growth vs. inflation
8%
6%
3.8%
2.9%
4%
2%
0%
0.7%
-2%-0.6%
-4%
-6%
-8%
-10%
Inflation
HH Spend change
Source: Kantar Worldpanel Ireland (ROI )
Grocery inflation across 38,000 items
1312
2013
1310
1308
1306
1304
1302
1213
1211
2012
1209
1207
1205
1203
1201
1112
2011
1110
1108
1106
1104
1102
1013
2010
1011
1009
1007
1005
1003
1001
912
2009
910
908
906
904
902
-12%
© Kantar Worldpanel
So how are
shoppers
coping?
Buy less?
Store choice?
Trade Down?
+1%
-1%
-2%
© Kantar Worldpanel
45.6
46.6
48
+6.7%
54.4
53.4
52
-3.0%
2011
2012
2013
VS.
© Kantar Worldpanel
?%
…..of the top 1000 brands are in
value sales growth
© Kantar Worldpanel
51%
…and growing for two
consecutive years?
© Kantar Worldpanel
21%
© Kantar Worldpanel
A Consistent Innovation Pipeline
13.2% 17.5%
% of grocery
spend from
NPD
For the growth
brands
© Kantar Worldpanel
Provide Pricing Clarity
2013
29% Sales
2012
24% Sales
2011
20% Sales
© Kantar Worldpanel
Balanced Trading Platform
Brand Distribution By No. Of Growth Stores
9
Average of 3.5%
sales through
Discounters
7
3
2
1
0
Growing in 6
Stores
Growing in 5
Stores
Growing in 4
Stores
Growing in 3
Stores
Growing in 2
Stores
Growing in 1
Store
© Kantar Worldpanel
FACT: SHOPPERS DON’T WORK OUT THE
DISCOUNT – THEY PERCEIVE VALUE
LESS DISCOUNT –
MORE WEEKS?
FACT: BUYING MORE INCREASES
NORMAL RATE OF PURCHASE RETURN
MULTIBUY
CONSTANTLY
PROMOTIONAL STRATEGIES TO CONSIDER
MOVE TOWARDS
PROMOTIONS
ON LARGER SIZES
FACT: DEAL ORIENTATED SHOPPERS ARE
BIASED TOWARDS FAMILIES
SAME DISCOUNT –
EXTEND ACROSS
MORE LINES?
FACT: SHOPPERS BUY MORE WHEN YOU
MAKE THINGS EASIER!
© Kantar Worldpanel
Consistent Growth Checklist
1. Innovate
2. Clear Pricing
3. Physical Availability
4. Trade with Discounters
5. Promote More (effectively)
© Kantar Worldpanel
© Kantar Worldpanel
2013
2018
€8.9b €9.8b
© Kantar Worldpanel