© Kantar Retail
January 2015

Copyright © 2015 Kantar Retail. All Rights Reserved.
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No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail.
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Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.
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© Kantar Retail

‒ Shoppers’ preference for Walmart’s core format continues to decline. Shoppers are visiting the
Supercenter less frequently and spending slightly less on each trip, even as they feel they are on relatively steady financial footing overall. As the Walmart shopper base shifts younger and toward smaller households, finding new ways to engage shoppers and to drive traffic —especially beyond edible grocery trips —will be essential.
‒ Perceptions of Walmart’s value proposition remain consistent. Seeking out low prices and finding good deals continue to be the top priorities of Walmart’s core shopper. However, as shoppers also value pleasant shopping experiences, the retailer has ground to make up in specific areas, such as the quality of its fresh assortment as well as its ability to execute basic aspects of the in-store experience such as maintaining in-stock position.
‒ Neighborhood Market penetration is growing, but the format still needs work. The expansion of the Neighborhood Market (NM) footprint provides a valuable opportunity to win shoppers’ increasingly smaller and more frequent trips. But that will require clarifying the value proposition for NM, which right now is a stock-up destination for shoppers. In addition, the high rate of cross-shopping between NM and the Supercenter highlights the potential for cannibalization between the formats, rather than new sales.
3
Source: Kantar Retail analysis
January 2015
© Kantar Retail

‒ Amazon’s penetration among Walmart’s core shoppers creates a significant competitive threat.
Not only is Amazon the top retailer cross-shopped by regular Walmart shoppers, but Walmart shoppers also are more likely to frequent Amazon.com than they are to regularly visit Walmart.com. Creating a shopping experience on Walmart.com that drives frequency and reach will be key.
‒ Shoppers’ engagement with mobile emphasizes the opportunities for engagement. Mobile is starting to change the nature of interactions between shoppers and retailers. The reach of Walmart’s mobile Savings Catcher tool, which launched in summer 2014 and had an almost immediate impact on the depth of the retailer’s relationships with its shoppers, is a prime example. Shopper marketing will need to reconsider the significance of this tool in the years ahead.
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Source: Kantar Retail analysis
January 2015
© Kantar Retail

Shopper Penetration
– Penetration by banner, channel
–
Demographic profile
Shopper Motivations
–
Financial concerns
– Spending intentions
–
Reasons to shop less
– Shopping priorities
Shopping Behaviors in Store
– Trips, trip type, and baskets: Supercenters, Neighborhood Market
–
Where else Walmart shoppers shop
Brand Position: Price, Assortment, Experience, Access
– Value demands and perceived price leadership
– Perceptions of the Walmart shopping experience
Digital Interactions
– Mobile engagement
– Savings Catcher
January 2015
© Kantar Retail
5

Penetration at the Walmart Supercenter continues to slowly decline, even as the retailer adds new stores. Shopper traffic to Neighborhood Market (NM) and Walmart.com is increasing as the retailer is making concurrent investments in these developing vehicles.
6
Meanwhile, the profile of the Supercenter and Discount shopper continues to shift. While the regular Walmart shopper still largely skews lower income and larger household, the total shopper base is becoming younger and higher income. In addition, likely in part because the base is getting younger, smaller households are making up a bigger share of Walmart’s base— which will influence what they look for in a one-stop stock-up trip.
The NM shopper is distinctive: younger, more urban, and more ethnically diverse than the
Supercenter’s shopper base. In a shift versus previous years, this shopper base’s degree of affluence is now the same as the Supercenters —skewing mid- to low-income (i.e., less than
$50,000 a year)
—instead of skewing slightly higher income. This shift may influence the types of products sought in store.
Walmart.com’s shopper is also different: the base is younger and more likely to have children at home versus the Supercenter’s core shopper base, making it a particularly attractive audience. Contrary to popular stereotypes, this audience is not more affluent than Walmart’s store shoppers
—suggesting that low prices play a key consideration for both Walmart’s digital and store audiences.
Sources: Kantar Retail analysis; store visits; website
January 2015
© Kantar Retail

Penetration is softening across many channels, as many shoppers curb the number of retailers they shop. The notable exception is the value and quick-trip convenience-oriented value discount channel.
7
Percent of Households Shopping Channel at Least Weekly
Weekly Shoppers, by Channel
Supermarkets
Convenience stores
Mass channel
Drug stores
Value discounters/dollar stores
Warehouse clubs
2009 –2014
PPD
+1.3
-2.3
-0.3
+0.4
+3.2
-1.0
Source: Kantar Retail ShopperScape ® , October 2009, 2010, 2011, 2012, 2013, and 2014
January 2015
© Kantar Retail

Shopper penetration at Walmart’s core big boxes continues to decline, losing 7 percentage points between 2007 and 2014 —as Amazon nearly doubled its penetration. Meanwhile,
Neighborhood Market’s expansion is boosting its share.
8
Percent Shopped Walmart during Past Four Weeks, by Format
Amazon.com
*Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2014
Source: Kantar Retail ShopperScape ® , January 2007 –September 2014
January 2015
© Kantar Retail

A higher share of shoppers say they recently shopped NM in Walmart’s core markets: the west, southwest, central, and southeast divisions. Penetration is lower in the northeast, where there are fewer NMs per capita.
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Percent Shopped Neighborhood Market in Past Four Weeks, by Region
9%
10%
10%
3%
9%
Regions based on Walmart’s small-format field structure
Source: Kantar Retail ShopperScape ® , October 2013 –September 2014
January 2015
© Kantar Retail

Walmart’s core shopper is now younger and higher income, and lives in a more densely populated area than five years ago. These shoppers also have smaller households.
10
Demographic Profile of Monthly Walmart/WMSC Shoppers
Annual HH Income
Kids in HH
Generation
Hispanic
<$25K
$25K
–$49.9K
$50K –$74.9K
$75K –$99.9K
$100K+
Children under 19 at home
Generation Y (born 1982 to 2002)
Generation X (born 1965 to 1981)
Baby Boomers (born 1946 to 1964)
Seniors (born before 1946)
Yes
Sample Size
All Shoppers
Q3 ‘14
12,211
25%
25%
18%
11%
21%
24%
18%
31%
38%
13%
12%
28%
17%
31%
40%
12%
12%
Monthly Walmart/WMSC Shoppers
Q3 ‘14 Q3 ‘13 Q3 ‘09
6,417
27%
6,531
27%
6,965
28%
28%
18%
10%
17%
28%
18%
11%
17%
29%
18%
11%
14%
28%
17%
31%
39%
14%
12%
30%
9%
32%
37%
22%
11%
Household Size
1 member
2 members
3+ members
Home Ownership
Own or are buying
Rent
Live with relatives (in their home)
Market Size
27%
34%
39%
63%
28%
7%
24%
34%
42%
63%
27%
7%
19%
36%
45%
64%
27%
6%
24%
34%
42%
66%
27%
4%
<100k
100k –499k
500k –1,999k
2m +
10%
15%
21%
53%
15%
19%
23%
43%
18%
19%
23%
41%
19%
19%
25%
38%
Note: Bolding/shading highlighting indicates significant difference between time periods noted (95% confidence level)
Source: Kantar Retail ShopperScape ® , July –September 2009, 2013, and 2014
January 2015
© Kantar Retail
-3.0
-0.5
+0.6
+2.0
5.3
-2.0
-3.3
-1.1
0.3
1.0
-0.1
0.5
0.2
0.8
-1.5
-0.4
PPT Difference
‘14–’13 ‘14–’09
0.5
-0.4
0.1
-0.3
0.0
-1.0
-1.1
-0.1
-0.8
3.0
-2.0
8.0
-0.8
2.7
-9.9
1.3
0.5
0.1
-0.6
-2.9
0.6
3.0
-4.9
-0.2
+1.5
+5.6

11
NM’s shopper base has begun to align more with the Supercenter base over time, particularly as NM’s base skews more lower income. But shoppers are more likely to live in denser markets, aligning with the strength of the stores in suburban and urban markets so far.
Demographic Profile of Past Four-Week Shoppers
Annual HH Income
Locale*
Kids in HH
Generation*
Race/Ethnicity
Sample Size
<$25k
$25k –$49.9k
$50k –$74.9k
$75k –$99.9k
$100k+
Rural
Small Town
Large Town
Suburban
Urban/City
Yes
No
Gen Y
Gen X
Boomers
Seniors
White Non-Hispanic
Black Non-Hispanic
Hispanic
Walmart SC
73%
18%
31%
38%
13%
66%
13%
14%
22%
13%
36%
11%
27%
27,556
27%
28%
18%
11%
16%
18%
Walmart NM
72%
23%
33%
33%
11%
52%
16%
22%
12%
14%
47%
20%
28%
3,201
28%
26%
18%
11%
17%
8%
Source: Kantar Retail ShopperScape ® , January –September 2014
January 2015
© Kantar Retail
NM shoppers also are more likely to be younger as well as to be Hispanic or
African American.
*See appendix for definitions
Note: Analysis limited to states in which NMKT was present as of January 2014
Note: Highlighting indicates significant difference between column percentages (95% confidence level)

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Given younger shoppers’ affinity for digital tools, it is not surprising that Walmart.com’s shopper base skews younger than the shopper base for the Supercenter.
Demographic Profile of Past Four-Week Shoppers
Annual HH Income
Locale*
Kids in HH
Generation*
Race/Ethnicity
Sample Size
<$25k
$25k-$49.9k
$50k-$74.9k
$75k-$99.9k
$100k+
Rural
Small Town
Large Town
Suburban
Urban/City
Yes
No
Gen Y
Gen X
Boomers
Seniors
White Non-Hispanic
Black Non-Hispanic
Hispanic
Walmart/WMSC
22,836
18%
22%
12%
37%
11%
27%
27%
18%
11%
17%
26%
74%
18%
31%
39%
12%
68%
12%
13%
Walmart.com
4,296
17%
21%
13%
34%
15%
27%
28%
18%
11%
16%
30 %
70%
19%
34%
38%
9%
66%
15%
12%
Source: Kantar Retail ShopperScape ® , January –September 2014
January 2015
© Kantar Retail
Walmart.com shoppers are also more urban and more likely to have kids, highlighting the opportunity to cater to young families with the convenience offered by online shopping.
*See appendix for definitions
Note: Highlighting indicates significant difference between column percentages (95% confidence level)

Shopper Penetration
– Penetration by banner, channel
–
Demographic profile
Shopper Motivations
–
Financial concerns
– Spending intentions
–
Reasons to shop less
– Shopping priorities
Shopping Behaviors in Store
– Trips, trip type, and baskets: Supercenters, Neighborhood Market
–
Where else Walmart shoppers shop
Brand Position: Price, Assortment, Experience, Access
– Value demands and perceived price leadership
– Perceptions of the Walmart shopping experience
Digital Interactions
– Mobile engagement
– Savings Catcher
January 2015
© Kantar Retail
13

A strengthening job market throughout the year, and falling gas prices to end it, has bolstered shoppers’ financial positions overall. But rising prices elsewhere are pressuring
Walmart shoppers’ ability to spend, and shoppers’ growing tendency to shop less in general are cutting into Walmart’s traffic.
14
• Walmart shoppers feel their financial health is about the same as it was last year, though some feel their income positions have strengthened.
• Still, a higher share of shoppers is shopping Walmart less often , largely a result of shopping less overall. In addition, Walmart’s core low-income shoppers’ capacity to spend is still being challenged by rising prices and household essentials spending.
• As shoppers seek out shopping experiences that are worth their time, priorities around product quality, assortment, and in-stocks are now more important than they were five years ago; conversely, one-stop shopping is less important.
Sources: Kantar Retail analysis; store visits
January 2015
© Kantar Retail

15
Across metrics, Walmart shoppers largely feel their financial health is about the same as last year, though their confidence in their income levels has improved.
Household Financial Health of Walmart Shoppers
Q3 2013 Q3 2014
Job security
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Household Income level
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Credit card debt
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Monthly mortgage/car payments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Worth of investments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Value of home
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
20%
62%
18%
28%
47%
24%
26%
56%
18%
22%
66%
12%
26%
57%
16%
28%
58%
14%
21%
64%
15%
30%
49%
21%
25%
57%
18%
20%
68%
11%
26%
60%
13%
29%
61%
10%
Note: Shading indicates significant year-to-year difference (90% CL)
Source: Kantar Retail ShopperScape ® , July-September 2013 and July-September 2014
January 2015
© Kantar Retail
Measured across a range of factors, significantly more shoppers than last year feel their financial health has stayed about the same.
However, a higher share feels better about income levels, likely a result of the stronger job market.

Walmart shoppers’ spending intentions are gaining traction over time, in line with all shoppers. A majority aim to hold spending steady, while nearly one-third are still curbing their budgets
—indicating that value appeals are still very important.
16
Near-Term Spending Plans: Percent Planning to
Spend More/About the Same vs. Same Time Last Year
(three-month moving average)
Near-Term Spending Plans vs. Same Time Last
Year: Q3 2014
Note: No significant differences between all shoppers and Walmart shoppers
(90% confidence level)
Source: Kantar Retail ShopperScape ® , January 2009 –September 2014 and July-September 2014
January 2015
© Kantar Retail

Of the nearly onethird of Walmart shoppers planning to spend less, Have Not households’ spending on essentials such as food and fuel is more likely to limit those shoppers’ ability to spend at retail; conversely, Haves are simply looking to save more.
17
Walmart Shoppers’ Reasons for Spending Less at Retail
(among past four-week Walmart/WMSC shoppers who said they planned to spend less at retail in the coming month vs. the same time a year ago)
Have Nots* Haves*
Not as much left over after buying food/HH essentials
HH income not keeping up with rising prices
Trying to simplify my life by buying fewer things
Trying to reduce/pay down credit card balances/debt
52%
46%
34%
31%
39%
30%
36%
35%
Saving more in general
Concerns about present economic conditions
HH income is lower vs. last year
Just have fewer needs this year than I did a year ago
Spending more on gasoline
27%
30%
28%
24%
26%
35%
28%
26%
25%
17%
Concerns about economic conditions 6 to 12 months from now
Spending more on healthcare
22%
22%
22%
20%
Spending more on home heating/cooling costs 23% 14%
*”Have Nots” are those with an annual household income of less than $60k; “Haves” are those with an annual household income of $60k+.
Note: Shading indicates significant year-to-year difference (90% CL)
Source: Kantar Retail ShopperScape ® , September 2014
January 2015
© Kantar Retail

An overall pullback in shopping is driving shoppers to visit Walmart less frequently. Other key reasons also involve shoppers looking for a more “pleasant” or “convenient” experience.
18
Shopping Frequency at Walmart/WMSC Compared with Same Time a Year Ago
Reasons for Shopping Less Often at
Walmart/Walmart Supercenter
Just shopping less in general
Other retailers offer more pleasant shopping experience
Shopping other retailers more conveniently located
May
2013
40%
28%
25%
Can find better overall value at other retailers
Doing more shopping at supermarkets
Shopping more at retailers where can get in and out quickly
22%
20%
18%
Doing more shopping at Target/SuperTarget
Doing more shopping at dollar stores
Doing more shopping at online-only retailers
Dividing shopping between more stores; doing less one-stop shopping
18%
14%
13%
12%
Doing more shopping at warehouse clubs 9%
Note: Shading indicates significant year-to-year difference (90% CL)
Source: Kantar Retail ShopperScape ® May 2013 and May 2014
January 2015
© Kantar Retail
May
2014
44%
21%
16%
14%
12%
10%
10%
20%
18%
20%
15%

Compared with their attitudes just after the recession, Walmart shoppers are now more focused on product quality, assortment, and availability in Walmart’s core categories.
19
Largest Changes in Reasons for Store Choice for Food/Groceries and HBC: 2014 vs. 2009
(among past four-week Walmart/WMSC shoppers)
Food/Groceries
Less Important vs. 5 Years Ago
Convenient location
Ability to one-stop shop
Open 24 hours
HBC Products
Less Important vs. 5 Years Ago
Convenient location
Better value
Ability to one-stop shop
More Important vs. 5 Years Ago
In-stock on items I want
High quality fresh foods
More brands I like
More Important vs. 5 Years Ago
High quality products
Broad selection of preferred products
Broad selection of brands
Source: Kantar Retail ShopperScape ® , Feb/May/Aug 2009 and Feb/May/Aug 2014
January 2015
© Kantar Retail

Shopper Penetration
– Penetration by banner, channel
–
Demographic profile
Shopper Motivations
–
Financial concerns
– Spending intentions
–
Reasons to shop less
– Shopping priorities
Shopping Behaviors in Store
– Trips, trip type, and baskets: Supercenters, Neighborhood Market
–
Where else Walmart shoppers shop
Brand Position: Price, Assortment, Experience, Access
– Value demands and perceived price leadership
– Perceptions of the Walmart shopping experience
Digital Interactions
– Mobile engagement
– Savings Catcher
January 2015
© Kantar Retail
20

Walmart’s grip on the stock-up trip is strong. But as its shopper penetration erodes and customer traffic wanes, it has seen flat to declining comps for most of 2014 and 2013. Lifting comps will depend on targeting specific areas of improvement in the Walmart shopping experience.
21
• Edible grocery remains a powerful trip driver for the
Supercenter. Walmart’s efforts to improve its fresh proposition with shoppers will be an important tool in boosting the frequency and basket size of these trips.
• NM also threatens to cannibalize the Supercenter’s position, given its popularity as a stock-up destination and high cross-shopping rates in areas where NM is present.
Honing NM’s assortment and messaging will be key to help differentiate the format’s proposition.
• Amazon continues to represent a formidable competitor to Walmart. Walmart.com has opportunity to increase both its reach and visit frequency with Walmart shoppers.
Source: Kantar Retail analysis; store visits
January 2015
© Kantar Retail

Shoppers’ average monthly trips to Walmart discount and supercenter stores ticked up in
2014. While this reverses the recent trend for Walmart, it is in line with overall trends in the channel. This rate is still behind NM shoppers, as they visit the store roughly six times a month.
22
Average Number of Trips per Month*
Comparatively,
NM shoppers now report making an average of 5.9 trips per month.
Note: *Self-reported
Source: Kantar Retail ShopperScape ® , Feb/May/Aug/Nov 2010 , 2011, 2012, 2013, and 2014
January 2015
© Kantar Retail

23
Grocery and consumables motivate the vast majority of trips to the Supercenter. Moving this traffic around the store through cross-box solutions that incorporate general merchandise will continue to be an important goal for Walmart.
Main Reason for Last Trip to Walmart Supercenter Was to Buy …
Edible grocery items
General merchandise
HH essentials HBC
Areas of Store Shopped/Purchased on Last Trip to Walmart Supercenter
Shopped Purchased
Highlighting the opportunity to support cross-box conversion from grocery to general merchandise
Conversion Rate
65% 60%
Edible grocery items
91%
53% 38%
General merchandise
72%
Source: Kantar Retail ShopperScape ® , May 2014
January 2015
© Kantar Retail
42% 37%
HH essentials
87%
44% 37%
HBC
84%

The Supercenter remains a stock-up destination, though many also use the store for quicktrip needs. Despite NM’s supposed role in Walmart’s portfolio as a fill-in trip destination, a higher share of its shoppers fulfill their stock-up trips at Neighborhood Market, though quick trips also are popular. In contrast, Dollar General is predominately a quick trip destination.
24
Primary Reason for Last Trip to Retailer
(last trip to buy food/groceries/HH essentials/HBC products)
*Analysis for all three retailers limited to states in which Neighborhood Market was present as of January 2014
Source: Kantar Retail ShopperScape ® , Aug/Nov 2013, Feb/May/Aug 2014
January 2015
© Kantar Retail

Suggesting a shift toward smaller-ticket purchasing, Walmart Supercenter/Discount shoppers’ basket sizes again declined in 2014—though the NM basket is still 13% smaller.
Grocery remained about 75% of the Supercenter/Discount basket, versus 80% for NM.
25
Amount Spent on Last Trip to Walmart/WMSC*
(most recent trip to buy food/groceries/
HH essentials/HBC)
$101
$96
$99
$95
$88
More effective cross-box merchandising could be an important tool to diversify and build baskets when shoppers are oriented toward smaller trips
Comparatively, shoppers reported spending $83 on their last trip to NM in 2014, with 80% of this spent on food, household essentials, and HBC items
Note: *Self-reported
Source: Kantar Retail ShopperScape ® , Feb/May/Aug/Nov 2010 , 2011, 2012, 2013, and 2014, Aug/Nov 2013 and Feb/May/Aug 2014
January 2015
© Kantar Retail

26
Amazon remains the top cross-shop destination for Walmart Supercenter/Discount shoppers, and Dollar Tree and Dollar General also have increased their penetration.
Top 25 Retailers Cross-Shopped by Walmart/WMSC Shoppers
Amazon.com
Walgreens
Target/SuperTarget
Dollar Tree
The Home Depot
CVS/pharmacy
Lowe’s
Kohl's
Dollar General
Kroger (all banners)
JCPenney eBay.com
Sam’s Club
Family Dollar
Best Buy
Macy's
ALDI
Bath & Body Works
Costco
Kmart
PetSmart
Barnes & Noble
Bed Bath & Beyond
Staples
Michaels
Jan –Oct 2009 Jan–Oct 2014
14%
19%
15%
18%
14%
17%
15%
23%
22%
18%
23%
18%
10% n/a
30%
39%
44%
24%
31%
28%
31%
27%
25%
23%
30%
54%
36%
33%
32%
31%
29%
29%
29%
28%
25%
24%
21%
21%
20%
19%
18%
17%
17%
15%
15%
15%
15%
15%
14%
14%
PPT Diff
‘14 vs. ‘09
24.0
-3.5
-10.1
7.8
-0.5
0.8
-1.6
2.2
2.5
1.5
-5.8
-1.6
-1.1
1.4
-3.6
0.4
6.4
n/a
1.3
-3.9
0.3
-3.1
0.6
-3.5
-1.3
The dollar stores’ and Aldi’s gains in penetration among
Walmart shoppers emphasize the intensifying competition for consumables trips.
Meanwhile, many of the retailers that have experienced the biggest cross-shopping declines among Walmart shoppers have concurrently seen sales struggles overall and increased competition from Amazon and others in general merchandise categories.
Note: Shading indicates significant difference between column percentages (95% confidence level)
Source: Kantar Retail ShopperScape ® , January-October 2009 and 2014
January 2015
© Kantar Retail

Amazon has nearly three times the online penetration with Walmart shoppers than
Walmart.com does. And Walmart shoppers are hooked: one in five shop Amazon weekly, twice the number who shop Walmart.com that often. Driving reach and frequency are two key concerns for Walmart.com.
27
Top 10 Online Retailers Shopped by
Walmart Shoppers
Walmart Shoppers
Shopping Frequency
7
8
9
10
5
6
3
4
1
2
Amazon.com
eBay.com
Walmart.com
Kohls.com
BestBuy.com
JCPenney.com
Target.com
BarnesandNoble.com
Macys.com
HomeDepot.com
8%
7%
7%
7%
54%
21%
19%
9%
9%
9%
Source: Kantar Retail ShopperScape ®, September 2013 –August 2014
January 2015
© Kantar Retail

NM shoppers’ cross-shopping patterns highlight regional competition for grocery dollars—as well as the potential for NM to cannibalize the Supercenter. For instance, in the central division, nearly every NM shopper also shops the Supercenter.
28
Top Grocery Retailers Also Shopped by Neighborhood Market Shoppers, by Region
West
Walmart/WMSC
Costco
Safeway
Albertsons
Trader Joe’s
WinCo Foods
60%
49%
34%
32%
31%
25%
Central
Walmart/WMSC
Sam’s Club
ALDI
Whole Foods
Hy-Vee
Dillons
85%
33%
28%
14%
12%
11%
Northeast
Walmart/WMSC
ALDI
Kroger
Sam’s Club
Food Lion
Whole Foods
65%
29%
27%
26%
20%
19%
Southwest
Walmart/WMSC 76%*
Southeast
Walmart/WMSC 77%
Whole Foods and other specialty grocers
(Sprouts, Trader Joe’s) notably have a solid cross-shop with NMKT shoppers across regions
Albertsons
Sam’s Club
Costco
34%
30%
25%
Publix
Winn-Dixie
Sam’s Club
69%
42%
28%
Sprouts 25%
ALDI 24%
H-E-B 22%
*Read as: 76% of Neighborhood Market shoppers also shopped at the Supercenter.
Save-A-Lot 18%
Note: Regions based on Walmart’s small-format field structure. Including grocery, Walmart, and club competitors
Source: Kantar Retail ShopperScape ® , October 2013-September 2014
January 2015
© Kantar Retail

Shopper Penetration
– Penetration by banner, channel
–
Demographic profile
Shopper Motivations
–
Financial concerns
– Spending intentions
–
Reasons to shop less
– Shopping priorities
Shopping Behaviors in Store
– Trips, trip type, and baskets: Supercenters, Neighborhood Market
–
Where else Walmart shoppers shop
Brand Position: Price, Assortment, Experience, Access
– Value demands and perceived price leadership
– Perceptions of the Walmart shopping experience
Digital Interactions
– Mobile engagement
– Savings Catcher
January 2015
© Kantar Retail
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Price, Assortment, Experience, Access
Walmart continues to emphasize its low price promise to its value-conscious shopper base —as these demands are still of primary importance. However, the retailer also recognizes that assortment, experience, and access are also very important —raising the strategic importance of these dimensions. The retailer is working to fix its immediate problems as well as to enable more solutions to meet shoppers’ rising demands.
• Shoppers’ perceptions of Walmart’s price position is strong , though supermarkets contend for value perceptions in fresh, and to a lesser extent nonperishable grocery.
• Assortment and experience dimensions of the trip have the opportunity to improve , including opinions of in-stocks, food selection, and store service.
Sources: Kantar Retail analysis; store visits
January 2015
© Kantar Retail
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Spending less is the top priority for Walmart shoppers, and it matters more to them. Notably, having fun also is more important to Walmart shoppers, and having a stress-free experience ranks just behind value considerations.
31
What Matters to Shoppers
(% ranking factor among top four most important when shopping)
Arrows indicate a significant difference between Walmart shoppers and all shoppers (95% confidence level)
Source: Kantar Retail ShopperScape ® , January –October 2014
January 2015
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32
Impressions of Walmart’s price leadership are positive and relatively strong across categories. The exception is fresh grocery, where supermarkets far outpace Walmart.
Shoppers also are divided on non-perishable grocery, where as many feel Walmart leads, as do supermarkets.
Type of Retailer Viewed as Price Leader, by Category
(among all primary HH shoppers)
32%
36% 37%
44%
31%
Shoppers’ perceptions of supermarkets’ fresh price proposition are much higher
23%
18%
Walmart/Walmart
Supercenter
14%
10%
Supermarkets
10%
8%
12%
4% 5%
2%
9%
11%
4%
1%
13%
5%
Warehouse clubs Target/SuperTarget Dollar stores
Non-Perishable Grocery Fresh grocery HH cleaning/paper HBC
2%
1%
3%
Drug stores
Source: Kantar Retail ShopperScape ® , November 2014
January 2015
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33
Walmart’s price promises largely measure up, but its efforts to improve in-stocks and to tailor assortment will be important to meet shoppers’ expectations. Also, not many agree that
Walmart is a “pleasant” place to shop.
Ideal Grocery/HH Essential/HBC Shopping Experience vs. Shopping Experience at Walmart
(among past four-week Walmart/WMSC shoppers)
85% 85%
80%
72%
65%
60%
56%
46%
50% 50% 50%
Knowing I'm paying a low price
30%
33%
21%
20%
13%
18%
7%
17%
7%
15%
2%
Feel like I'm getting a "good deal"
Private label brands in many categories
Items I want are in-stock
Food offer matches up with what I like to cook/eat
High-quality private label brands
Price
Local food products available
Assortment and Access
Important when grocery/HH essential/HBC shopping
Local interest items available
Fun/pleasant to shop
Store associates available to give good advice
Can use
Walmart app to make in-store experience easier
Experience
Describes shopping experience at Walmart
Source: Kantar Retail ShopperScape ® , May 2014
January 2015
© Kantar Retail

Shopper Penetration
– Penetration by banner, channel
–
Demographic profile
Shopper Motivations
–
Financial concerns
– Spending intentions
–
Reasons to shop less
– Shopping priorities
Shopping Behaviors in Store
– Trips, trip type, and baskets: Supercenters, Neighborhood Market
–
Where else Walmart shoppers shop
Brand Position: Price, Assortment, Experience, Access
– Value demands and perceived price leadership
– Perceptions of the Walmart shopping experience
Digital Interactions
– Mobile engagement
– Savings Catcher
© Kantar Retail
34

As how shoppers interact change, so to must Walmart’s means of engaging them. In particular, mobile devices are becoming the interface of these exchanges, as using these devices to search for coupons or research assortment options is becoming increasingly popular
—especially among Walmart’s base.
35
• Walmart’s rollout of Savings Catcher, its digital pricematching tool —as well as the program’s quick uptake by shoppers —highlights the willingness of shoppers to take part in mobile and its ability to drive relationships with shoppers in the store.
• Even as Walmart increases its investments in digital, the retailer still has opportunity to build its reach , as its mobile connection with shoppers lags behind competitors such as Amazon and Target. Investments in mobile will be a key means to integrate digital into the established
Walmart shopping experience and to reach increasingly connected shoppers.
Sources: Kantar Retail analysis; store visits
January 2015
© Kantar Retail

Walmart shoppers are more likely to engage in a range of activities on smartphones, particularly when it comes to savings- and assortment-oriented features.
36
Activities Engaged in on Smartphone during Past Six Months
(among smartphone owners)
Index: Walmart
Shoppers vs. Total
104
121
104
111
111
110
110
107
105
108
100
108
100
Note: Green indices indicate significantly greater vs. all shoppers (95% confidence level)
Source: Kantar Retail ShopperScape ® , March 2014
January 2015
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37
When it comes to interacting with its own shoppers via its mobile app, Walmart trails
Amazon, Target, and Costco. About half of its shoppers who use the app used it in-store, however, indicating the opportunity for suppliers to support in-store mobile integration efforts.
Percent of Retailers’ Past Four-Week Shoppers Who Used Retailer Apps in Past Few Months
(among smartphone owners)
34% Used app Used app IN RETAILER STORE
24%
16%
19%
9%
15%
7%
15%
7%
14%
6%
13%
6%
11%
3%
8%
4%
7%
3% n/a
Amazon Target Costco CVS Walmart Walgreens Best Buy Sam's Club Home Depot Lowe's
Source: Kantar Retail ShopperScape ® , January 2014
January 2015
© Kantar Retail

Walmart shoppers rank access to promotions their top priority for mobile app features, with tools that make the store experience easier —such as item location, geo-targeted deals, and lists —not far behind. Accordingly, Walmart advertised such deal features on its app this past holiday.
38
What Shoppers Would Like to Be Able to Do on Walmart App In-Store
(among Walmart shoppers who own a smartphone)
Note: Gen Y Walmart shoppers significantly more likely to want every feature vs. all Walmart shoppers (95% confidence level)
Source: Kantar Retail ShopperScape ® , January 2014
January 2015
© Kantar Retail

A month after this digital ad match tool rolled out nationally, Savings Catcher had already garnered widespread awareness, and even higher awareness among Walmart shoppers.
39
Awareness of Walmart’s Saving Catcher Tool
(% of shoppers who are aware of Savings Catcher)
*Recent shoppers are those who have shopped Walmart/WMSC during the past four weeks; regular shoppers are those who say they usually shop Walmart/WMSC every month
Source: Kantar Retail ShopperScape ® , September 2014, Kantar Retail store visits
January 2015
© Kantar Retail

40
About one in five Walmart shoppers have already used Savings Catcher; that figure jumps to two in five among those who are aware of the tool. Walmart’s Gen X and “Have” shoppers are most likely to have used Savings Catcher.
Percent of Walmart Shoppers Who Have Used Savings Catcher, by Cohort
Walmart recently reported that 81% of the Savings Catcher receipts came through mobile devices, indicating that this program is driving usage of Walmart’s mobile app.
*Have Nots have an annual HH income of less than $60k; Haves have an annual HH income of $60+
Source: Kantar Retail ShopperScape ® , September 2014
January 2015
© Kantar Retail

For further information please refer to www.kantarretail.com
Contact:
Laura Kennedy
Principal Analyst
Laura.Kennedy@kantarretail.com
+1 617 912 2851
Rachel McGuire
Principal Analyst
Rachel.McGuire@kantarretail.com
+1 614 355 4036 www.kantarretailiQ.com
kantarretail
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© Kantar Retail
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®
Generational Cohorts
 Gen Y : Born 1982
–2002 (note: ShopperScape ®
18 to 32 years old in 2014) surveys heads of household 18+, so Gen Y respondents in ShopperScape
® are
 Gen X : Born 1965 to 1981 (33 to 49 years old in 2014)
 Boomers : Born 1946 to 1964 (50 to 68 years old in 2014)
 Seniors : Born in 1945 or earlier (69 or older in 2014)
Haves & Have-Nots
 Haves: Annual HH Income > $60,000
 Have-Nots : Annual HH Income $60,000+
Locale
 Rural: I have to drive more than 10 miles to do even basic shopping (such as for groceries)
 Small Town : I live in or near a town where I can do all or most of my everyday shopping (such as for groceries) and shopping for some special purchases (such as a television or dress apparel), but I have to travel to a larger city to have more than a couple of options for shopping for special purchases
 Large Town : I live in or near a large town where I do all or most of my shopping, both for everyday needs and special purchases, but the town is not immediately next to a major metropolitan area
 Suburban : I live in a community surrounding a major metropolitan area that contains many retail shopping options, including multiple grocery stores, shopping centers, etc.
 Urban/City : I live in a densely populated neighborhood where I primarily/exclusively walk or use public transportation/cabs to do my everyday shopping (such as for groceries)
© Kantar Retail