Confidential & Proprietary
Copyright © 2010 The Nielsen Company
The Consumer & The Economy
Road to Recovery
Jeff Silvas
Director – Business Development
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
To understand where we are headed, we must know where we are and
where we came from
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Yesterday Today Tomorrow
Understanding Where We are Headed
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Sept 7th
U.S Treasury takes over Fannie Mae & Freddie Mac
Sept 15thLehman Brothers files for bankruptcyMerrill Lynch taken over by Bank of America
Sept 16thFederal Reserve & Treasury lend $85 bill to AIG
Sept 25thWarren Buffett infuses $5 bill to rescue Goldman Sachs
Sept 28th$700 billion government bailout
Oct 2ndIMF warns U.S. headed for deep recession
Oct 3rdPayrolls decline 159,000 - 9th straight month of decline
Oct 8thAIG receives additional $37.8 bill from TreasuryInterest rate cuts from major worldwide central banks
Oct 9thDow closes at 8600 - lowest since 200340% below all time high set almost one year ago
Oct 10thWorst week in Dows 112 year history
Unprecedented Events Were Happening Seemingly Daily
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Yesterday
-3%
-2%
-1%
0%
Sep-08 Oct-08 Nov-08 Dec-08
Unit Sales Shopper Trips
-3%
-2%
-1%
0%
Sep-08 Oct-08 Nov-08 Dec-08
Transaction Size
0%
1%
2%
3%
4%
Sep-08 Oct-08 Nov-08 Dec-08
Store Brands
3%
4%
5%
6%
Sep-08 Oct-08 Nov-08 Dec-08
Consumers Responded as Expected
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
25
35
45
55
65
75
85
95
105
115
125
May
-01
Sep-0
1
Jan-
02
May
-02
Sep-0
2
Jan-
03
May
-03
Sep-0
3
Jan-
04
May
-04
Sep-0
4
Jan-
05
May
-05
Sep-0
5
Jan-
06
May
-06
Sep-0
6
Jan-
07
May
-07
Sep-0
7
Jan-
08
May
-08
Sep-0
8
Jan-
09
May
-09
Sep-0
9
Jan-
10
Jul-1
0
The Conference Board - Nine census regions, 5,000 US households; 1985 = 100
2001 2002 2003 2004 2005 2006
Consumer Confidence still Unstable
2007 2008 2009 2010
Consumer Confidence Index
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Understanding Where We are Headed
Yesterday Today Tomorrow
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Sources: U.S Leading Economic Indicators
Tepid Recovery = Tepid ConsumptionNov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09
Index of Leading Indicators:
Composite of ten indicators
Equity Markets
(Dow, NASDAQ, S&P)
Consumer Expectations
Index
Building Permits
New Factory Orders
Capacity Utilization
Productivity: Output per
man-hour worked
Weekly Jobless Claims:
4 wk moving avg
Avg weekly hours worked
Help wanted Ad Indexes
Positive Neutral Negative Early stages of moving to neutral
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
86%
95% 94% 91%
24%
26%
19%18%
90%
21%
U.S Households Continue Mired in a Recession, Long Term Sentiment Unchanged
Oct 2008 Apr 2009 Jul 2009 Oct 2009 Dec 2009
% of U.S. HHs that believe they are in a recession
% of U.S. HHs that believe they will be out of a recession in the next 12 mos
Source: Nielsen Global Consumer Confidence Survey
Confidential & Proprietary
Copyright © 2010 The Nielsen CompanyPage 10
Source: Seasonally Adjusted U.S. Total Non Farm Employment, U.S. Government
15.3 MM still jobless
Monthly Job Gains/Losses
July 2010: 9.5% Unemployment
46% unemployed for longer than 27 weeks
Confidence Gaining in the Recovery as Labor Market Trend Continues
•-753K
•-582K
•-347K
•-504K
•-344K
•-211K•-225K•-224K
•64K
•-109K
•-26K
•35K
•230K
•290K
•-681K
•41,000
•-597K
•-380K
•-321K
•-175K
•-128K
•-161K•-137K
•-160K•-122K
•-144K
•-72K
•-779K
•-726K•-800,000
•-700,000
•-600,000
•-500,000
•-400,000
•-300,000
•-200,000
•-100,000
•0
•100,000
•200,000
•300,000
•Dec-
•07
•Jan-
•08
•Feb-
•08
•Mar-
•08
•Apr-
•08
•May-
•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
•Jun-
•09
•Jul-
•09
•Aug-
•09
•Sep-
•09
•Oct-
•09
•Nov-
•09
•Dec-
•09
•Jan-
•10
•Feb-
•10
•Mar-
•10
•Apr-
•10
•-26K•-26K•36K
July 2010
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Top 10 States: Unemployment & Foreclosures
Unemployment Rate Foreclosure Rate (1 in)
1 Michigan 14.1% 1 Nevada 102
2 Nevada 13.2 2 Arizona 163
3 Rhode Island 12.7 3 Florida 163
4 California 12.5 4 California 195
5 S. Carolina 12.5 5 Michigan 226
6 Florida 12.2 6 Utah 275
7 Wash DC 11.9 7 Idaho 296
8 Illinois 11.4 8 Illinois 305
9 Mississippi 11.4 9 Georgia 331
10 N. Carolina 11.2 10 Maryland 407
Top 10 Unemployment/Foreclosure
Sources:
*Bureau of Labor Statistics (Feb 2010)
**Realty Trac (Feb 2010)
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Source: BLS
Over 7 million jobs lost since Jan 2008
Seasonally Adjusted U.S. Total Non Farm Employment, U.S. Government
A Perspective to Consider
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
2,218
498
0
500
1,000
1,500
2,000
2,500
2000
- M
ar
2000
- Sep
2001
- M
ar
2001
- Sep
2002
- M
ar
2002
- Sep
2003
- M
ar
2003
- Sep
2004
- M
ar
2004
- Sep
2005
- M
ar
2005
- Sep
2006
- M
ar
2006
- Sep
2007
- M
ar
2007
- Sep
2008
- M
ar
2008
- Sep
t
2009
- M
ar
2009
- Sep
t
2010
- M
arch
Building Permits In thousandsSept 2005
Source: Census.gov
Apr 2009
Housing Trending Up, But Far Off Pre-Recession Levels & Foreclosures Rising
Confidential & Proprietary
Copyright © 2010 The Nielsen CompanyPage 14
-23.4%
-4.1%
8.6%
1.3%
5.9%
-1.4%
0.0% 0.8%
-4.9%
4.2% 3.5%
21.3%
-25.1%
-2.3%
13.7%
0.2%
-2.0%-0.3%
0.4%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Jan-
09
Feb-
09
Mar-
09
Apr-
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
Jun-
10
Jul-10
YesterdayOn the Sidelines
TodayIn the Game
Dept of Commerce: Total Retail Sales ex Auto
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
In the Game but at Restrained LevelsToday
-1%
0%
1%
2%
Sep-09 Oct-09 Nov-09 Dec-09
Unit Sales
-3%
-2%
-1%
0%
1%
Sep-09 Oct-09 Nov-09 Dec-09
Transaction Size
0%
1%
2%
3%
4%
5%
Sep-09 Oct-09 Nov-09 Dec-09
Store Brands
Shopper Trips
-4%
-3%
-2%
-1%
0%
Sep-09 Oct-09 Nov-09 Dec-09
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
A “New” Normal Focused Around the Home
Source: Nielsen National People Meter Panel – Average TV viewership in the U.S., Nielsen Bookscan, Nielsen Online
> 1 MM Viewers Tuning
in During Primetime
Cookbook
sales +9%
Traffic to internet food
sites +11%
Blu-ray disc sales +86%
Avg # of video games purchased in
past 6 months :10
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Dining: That Was Then...
Same store sales trends (Year Ago % Change)
FlemingsOn the Border
Mac GrillBonefish
Ruby TuesdayOutback
O'CharleysPF ChangsMimis Café
Ruth ChrisApplebees
Bahama BreezeRed Lobster
MaggianosChilisCarrabas
Cheesecake FacLandrys
Cap GrilleJ Alexanders
Grand LuxTexas Roadhouse
Olive GardenBenihanaCPKRed Robin
Kona GrillBJ's
Buff Wild WingsMortons
Grill Concepts
McCorm. & Schmicks
-10 -8 -6 -4 -2 0 2 4 6 8 10Source: Company Reports -NRN (Dec 22, 2008)
2007
20 of 32 operators reported same
store gains; Overall avg: +1%
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
MortonsRuth Chris
FlemingsCap Grille
McCorm. & SchmicksBenihana
Red RobinMac GrillOutback
Dave & BustersKona Grill
PF ChangsBonefish
CPK
O'CharleysFamous Dave's
MaggianosMexican Rest
ApplebeesLandrys
Mimis CaféBahama Breeze
Longhorn SteakhouseChillis
Grand LuxCarrabas
J AlexandersOn the Border
Ruby Tuesday
Cheesecake Fac Buff Wild WingsBJ's
Olive GardenTexas Roadhouse
Red Lobster
-30 -28 -26 -24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4
Source: Company Reports - NRN (Nov 9, 2009); Latest Quarter
Q3 2009
Same Store Sales Trends
% Change vs Prior Year
Current Year Ago 2 Year Ago
-8.8% -4.2% +1.3%
And at its Worst…34 of 35 in Decline
Financial reporting thru Nov 9, 2009
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
MortonsMexican Rest
Ruth ChrisRed Robin
Famous Dave'sMimis Café
Kona GrillDave & Busters
O'CharleysBahama Breeze
BenihanaOutback
CPK
PF ChangsJ Alexanders
LandrysOn the Border
ApplebeesGrand Lux
CarrabasChillis
Cap GrilleRuby Tuesday
Texas RoadhouseMaggianosRed Lobster
Cheesecake Fac
McCorm. & Schmicks
BJ's
Olive GardenBuff Wild Wings
BonefishLonghorn Steakhouse
Flemings
-16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6Source: Company Reports - NRN (March 8, 2010); Latest Quarter
Same Store Sales Trends
% Change vs Prior Year
Current Year Ago 2 Year Ago
-5.0% -7.6% -0.7%
Q4 2009
And Now… Still Negative, But Not as Negative – Against Severe vs. Easier Comps
Financial reporting thru Feb 10, 2010
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Selected Fast Casual/Family Dining/QSR- declines much less severe than fine/casual dining
Cosi
Jack in the Box
Carl Jr's
Yum BrandsDennys
Sonic
Arbys
Bob Evans
Burger King
Hardees
Rubios
Qdobal Mex.
IHOP
Popeyes
Pei Wei
McDonalds Papa Johns
Frisch Big Boy
Dominos
Wendys
Tim Hortons
Chipotle
PaneraStarbucks
Pizza Inn
Chuck E. Cheese
Steak n Shake
-16 -15 -14 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Source: Company Reports -NRN (March 8, 2010); Latest quarter, except Lat 4 weeks for McDonalds, Carl’s Jr, and Hardees
Q4, 2009
Same Store Sales Trends
% Change vs Prior Year
Current Year Ago 2 Year Ago
-1.8% -1.2% +1.4%
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Source: MultiAd Kwikee and Lou Malnati’s
If You Can’t Beat Them, Join Them
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
...and Celebrity Chef Brands Too
Selected Restaurant &
Celebrity Chef Brands
11.514.0
Dollar %-Change vs Two Years Ago
Unit %-Change vs Two Years Ago
Source: MultiAd Kwikee Source: The Nielsen Company; (U.S. FDM w/ Walmart); 52 weeks ending 04/17/2010; Food & Non-Alc Bevs
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Giada De Laurentiis Partners With Target for Store-Brand Line
Source: Target & Food Network
Confidential & Proprietary
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18%
27%
32%
38%
42%
68%
82%
83%
Serve Store-Bought
Prepared Meal
Microwave Frozen Meal
Add Few Ingredients to
Prepared Meal
Reheating Leftovers
Baking Frozen Food in
Oven
Barbecuing
Preparing Most
Ingredients For Meal
Preparing Scratch Meal
Diverse Definition for Cooking
Which of the following would you consider “cooking?” Please select all that apply.
Source: Homescan® 09/2009 survey, a service of The Nielsen Company
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
69%
69%
71%
72%
73%
73%
75%
75%
77%
78%
82%
82%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I enjoy cooking for company/guests
I know how to use many different spices
Flavor is more important than calories
I often seek out new recipes
Dinner should have meat and couple of side dishes
I really enjoy cooking and experimenting with recipes
I tend to repeat the same meals a lot
I know how to cook the different cuts/types of meat
I prefer to prepare meals from scratch
I like to learn about food and cooking
I like to try different recipes
Cooking makes me feel like I’m taking care of my family
% Agree Completely/Somewhat
In Tough Times, Cooking Delivers on Basic Consumer Needs
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Social MediaGames DVD/Blu-ray
Source: Nielsen National People Meter Panel – Average TV viewership in the U.S., Nielsen Bookscan, Nielsen Online
Avg number of
games purchased in
past 6 months: 10
YTD thru 9/27/09,
Blu-ray sales are +86%
while DVD sales
are –12.7%
In time spent, member
communities top
video/movies, search
and email
Consumers are Focused on Home
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
19
50
-19
51
19
52
-19
53
19
54
-19
55
19
56
-19
57
19
58
-19
59
19
60
-19
61
19
62
-19
63
19
64
-19
65
19
66
-19
67
19
68
-19
69
19
70
-19
71
19
72
-19
73
19
74
-19
75
19
76
-19
77
19
78
-19
79
19
80
-19
81
19
82
-19
83
19
84
-19
85
19
86
-19
87
19
88
-19
89
19
90
-19
91
19
92
-19
93
19
94
-19
95
19
96
-19
97
19
98
-19
99
20
00
-20
01
20
02
-20
03
20
04
-20
05
20
06
-20
07
20
08
-20
09
Avg
Da
ily H
ou
rs
The gold bars indicate the years
that the U.S. was in a recession.
Based on Sept-Sept Broadcast Year Average, Live stream
8 out of 9 Past Recessions, TV Viewing has Increased
Confidential & Proprietary
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While Not Growing at the Pace of New Media, TV is Still King
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Dining Location Openings Continued to Be at
Relatively Low Levels into 2010
Dining Location Openings and Closings
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 Q1 2010
New Closed
Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company; thru Q1 2010
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Consumers
Recalibrating a
“New Normal”
Confidential & Proprietary
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2005 vs. 2004% Chg Unit Sales Leaders
Source: Scantrack®, a service of The Nielsen Company; (FDM w/ Walmart) 52 weeks ending 11/28/09 (versus prior year) – minimum $100 million in sales
Desserts - Dairy 18%
Mens Toiletries 14%
Tea 13%
Yogurt 11%
Bottled Water 10%
Dressings / Salad 9%
Seasonal Merch 9%
Cough & Cold 8%
Wine 7%
Grooming Aids 6%
Personal Bath Needs 6%
Frozen Prep Foods 5%
Breakfast Foods 5%
Frozen Vegetables 5%
Skin Care 5%
Canning & storage 11%
Wine 7%
Vitamins 5%
Fresh Meat 5%
Dry Veg & Grains 5%
Dry Mix Prep Foods 4%
Flour 3%
Ref Juice & Drinks 3%
Salads, Prep Foods 3%
Frozen Novelties 3%
Frozen Vegetables 3%
Yogurt 2%
Jams & Jellies 2%
Liquor 2%
Cough & Cold 2%
2008 vs. 2007% Chg Unit Sales Leaders
Canning & Storage 11%
Fresh Meat 7%
Frozen Novelties 7%
Cheese 6%
Vitamins 5%
Dry Mix Prep Foods 5%
Baking mixes 5%
Yogurt 5%
Wine 5%
Pasta 5%
Fresh Produce 5%
Ref Juices & drinks 4%
Prepared Foods 4%
Condiments 4%
Shortening & oil 4%
2009 vs. 2008*% Chg Unit Sales Leaders
Consumers Actions Tell the StoryPersonal care & Discretionary has given way to At Home Meals & Preps
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Trend Drivers: Dairy, Dry Grocery
Still Declining: Packaged Meat, Deli, Frozen Foods, Alcoholic bev,Fresh Produce
Trend Drivers: Dairy, Dry Grocery
Still Growing: Fresh Produce,Fresh Meat, Alcoholic Bevs, Deli, Packaged Meat, Frozen Foods,HBA, Non-Food Grocery,
3.0
2.2
3.5
2.0
-0.6-0.2
Retailer
Brands
Branded
Source: Scantrack®, a service of The Nielsen Company; (FDM w/ Walmart) ending 04/19/2010 (versus prior year)
% Unit Sales Growth for last 6 (4-week) periods
U.S. consumers turned to Retailer Brands in a down economy, but branded now improving
0.2
-0.6
0.7
1.0
0.10.2
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
Nov -
07
Dec-
07
Jan-
08
Feb-
08
Mar-
08
Apr-
08
May -
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
Jun-
09
Jul-
09
Aug-
09
Sep-
09
Oct-
09
00:00.0
01:26.4
02:52.8
04:19.2
05:45.6
07:12.0
08:38.4
Unique Audience Time Per Person
Source: Nielsen Online NetView; US only; Home & Work Combined
Q1 Q2 Q3 Q4
2008 -7% -1% -3% +10%
2009 +17% +33% +29% +26%
% change in manufacturer
coupon redemptions -
Inmar
Coupons Back in Vogue w/More Visitors & More Time Spent on Coupon Sites
Confidential & Proprietary
Copyright © 2010 The Nielsen CompanyPage 34
•Retailing
Trends
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Discretionary Making Comeback, But Off Poor 2009; Weaker 2010 for Nat’l Grocers & Walmart
2008/2009
-15 -10 -5 0 5 10 15
Costco
BJ's
Sams
Kroger
Safeway
SuperValu
Dollar General
Dollar Tree
Family Dollar
Kmart
Walmart
Target
CVS
Walgreens
Rite Aid
Whole Foods
Kohls
Nordstrom
Macy's
JC Penney
Lowe's
Home Depot
Source: Company press releases; latest monthly results (excl fuel) for all but Sam’s Club, Kroger, Safeway, SuperValu, Dollar General, Family Dollar, Walmart, Dollar Tree, CVS, Kmart, Whole Foods, Home Depot, Lowe’s – latest quarterly report
2009/2010
-10 -5 0 5 10
Costco
BJ's
Sams
Kroger
Safeway
SuperValu
Dollar General
Dollar Tree
Family Dollar
Kmart
Walmart
Target
CVS
Walgreens
Rite Aid
Whole Foods
Kohls
Nordstrom
Macy's
JC Penney
Lowe's
Home Depot
Stock Up
& Save
Value &
Convenience
DiscretionarySpending
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
143,997
37,658
32,211
6,457
20,788
3,401
1,207
124,516
40,102
31,183
6,421
13,151
1,583
907
Convenience
Drug
Supermarkets
Mass Merch
Dollar Stores
Supercenters
Warehouse Clubs 2001
2009
Value Winning as Evidenced by Increased Store Count – Store Closings During Down Economy
U.S. Store counts
Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
1,875
fewer
stores
since
end of
2007
Mass Merchandisers, Drug &
Convenience/Gas count off from
end of 2008
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Walmart & Target Leading Store Expansion versus Major Grocers
708
1,020
1,495
1,515
1,613
2,468
1,304
1,744
4,309
1,250
682
1,565
549
1,460
2,433
2,088
1,056
3,218
Ahold
Publix Grocery
Safeway Corp Grocery
SuperValu Corp Grocery
Delhaize Grocery
Kroger Corp Grocery
Kmart - Tot
Target - Tot
Wal-Mart - Corp*
2001
2009
*Includes Division 1, Supercenters, Neighborhood Markets & Sam’s Club
U.S. Store counts“Walmart to focus on remodels & accelerating growth in new,
more efficient Supercenters”
Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
Target to aggressively
expanding food offering &
focusing on remodels; testing
smaller format
Acquiring Ukrops
Closing 16 locations &
opening 120 to 130 new stores
in fiscal 2010; increased focus
on Bottom Dollar banner
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
98
77
80
64
70
50
38
100
95
86
59
51
50
45
Grocery
Mass Merch
Drug
Dollar
Supercenters*
Warehouse
Conv/Gas2001
2009
Value Winning As Evidenced By Consumer Acceptance
Benefits from
new store
openings
% Household Penetration
**
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips
** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only
buys & purchases of immediate consumables *Includes Kmart, Target & Walmart
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
59
26
14
14
13
13
11
72
20
24
15
15
11
10
Grocery
Supercenters*
Mass Merch
Drug
Conv/Gas
Dollar
Warehouse2001
2009
Grocery & Mass trips
continue to drop
Value Channels Grabbing Trips
Trips Per household
**
*Includes Kmart, Target & Walmart
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips
** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys &
purchases of immediate consumables
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Walmart Sales Almost as Large as Next Four Competitors
Top 10 Grocery Chains
$0 $20 $40 $60 $80 $100 $120 $140 $160
Walmart
Kroger
Safeway
Supervalu
Ahold USA
Publix
Delhaize America
H.E. Butt
A&P
Meijer
Est. Annual ACV (billions)
Source: Progressive Grocer – May 2009
$152.8
$146.3
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Aggressively Promoting “Unbeatable Prices” in Print Ads & on Billboard Located 2 Blocks from Target HQ
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Some Big Players Going with Smaller Formats, But Marketside Expansion on Hold
Source: Company websites, Reuters, Orange County Register
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Neighborhood Market by Walmart – Still in Expansion Plans with Focus on Fresh
Store Count 148
Avg. $ per Store $30 Million
Avg. Store Size 42,000
Planned Growth Appx. 10 per year
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Source: Cincinnati Enquirer
Investing in New Formats & Stepping Up Marketing Activities
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Less Is More at Retail as They Look to:
•Enhance in-store shopping experience:• Simplify shopping experience
• Providing right product mix for category & overall
store (SKUs reductions)
• Improve merchandising • Providing cleaner floors with fewer displays
•Enhance margins w/reduced costs & better
inventory management
•Grow store brands
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% Change in All-Outlet Shopping
-5
-4
-3
-2
-1
0
1
2
3
4
5
09/
06/0
8
10/
04/0
8
11/
01/0
8
11/
29/0
8
12/27/
08
01/
24/0
9
02/21/
09
03/21/
09
04/18/
09
05/16/
09
06/13/
09
07/11/
09
08/08/
09
09/05/
09
10/03/
09
10/31/
09
11/28/
09
12/26/
09
01/23/
10
02/20/1
0
03/20/1
0
04/17/1
0
4-week period ending
Shopping Trips Shopping Basket $ Ring
Consumers Have Adjusted: Fewer Shopping Trips & Spending Less Per Trip
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips; versus year ago
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% Change in All Channel Shopping Trips
-8
-6
-4
-2
0
2
4
6
09/
06/0
8
10/
04/0
8
11/
01/0
8
11/
29/0
8
12/27/
08
01/
24/0
9
02/21/
09
03/21/
09
04/18/
09
05/16/
09
06/13/
09
07/11/
09
08/08/
09
09/05/
09
10/03/
09
10/31/
09
11/28/
09
12/26/
09
01/23/
10
02/20/1
0
03/20/1
0
04/17/1
0
4-week period ending
$70K +
$30 to $69.9K
< $29K
Trip Compression From Lower Income; Trip Growth From Affluent in Most 2009 Periods
Share of Basket Ring Dollars*
42%
36%
22%
* Latest Period
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips; versus year ago
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% Change in Retail Channel Shopping Trips
-15
-10
-5
0
5
10
09/
06/0
8
10/
04/0
8
11/
01/0
8
11/
29/0
8
12/27/
08
01/
24/0
9
02/21/
09
03/21/
09
04/18/
09
05/16/
09
06/13/
09
07/11/
09
08/08/
09
09/05/
09
10/03/
09
10/31/
09
11/28/
09
12/26/
09
01/23/
10
02/20/1
0
03/20/1
0
04/17/1
0
4-week period ending
Supercenter
Club
Grocery
Dollar
Drug
Conv/Gas
Mass Merch
Source: Homescan®, a service of The Nielsen Company; excludes gas only or Rx only trips; versus year ago
Value Retailers Winning Trips, But Tough Start to the Year w/Low Consumer Confidence & Poor Weather
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“Great Recession” Driving Shifts in Consumer Shopping & Industry Innovation
• Value retailers winning & will likely maintain preferred status for many as economy improves
• Good news - discretionary retailers showing improvement
• Accelerated industry innovation & collaboration
• New formats
• Store expansion
• Meal deals
• Value messaging & promotions
• On-line engagements
• New & expanded offerings
• What are you doing to drive shopping trips & build baskets?
• Diverse retail shopper bases enables opportunities to differentiate via assortment, pricing, promotion, & communication
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Buying
Trends
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Inflationary Pressures Drove Stronger Growth Last Year – More Non-Edibles This Year
52-Weeks Ending April 18, 2009 % 52-Weeks Ending April 17, 2010 %
Vegetables & Grains-Dry 31.2 Canning/Freezing Supplies 35.5
Flour 28.2 Tobacco & Accessories 12.6
Pasta 22.7 Insecticides Repellants 9.3
Canning/Freezing Supplies 21.6 Vitamins 8.4
Shortening/Oil 16.4 Sugar/Sugar Substitutes 8.2
Butter & Margarine 12.9 Personal Soap/Bath Needs 6.9
Baking Mixes 11.6 Vegetables-Canned 6.7
Pet Food 11.1 Pizza/Snacks-Frozen 6.6
Vegetables-Canned 10.9 Condiments/Gravies/Sauce 5.9
Salad Dressings/Mayo/Top 10.2 Yogurt 5.6
Top 10 Fastest Growing Categories (Dollar %-Change vs YAGO)
Source: Scantrack®, a service of The Nielsen Company; (U.S. FDM w/ Walmart) – *minimum $100 million in sales
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This Year it Is Less About Food Basics
52-Weeks Ending April 18, 2009 % 52-Weeks Ending April 17, 2010 %
Canning/Freezing Supplies 14.3 Canning/Freezing Supplies 10.2
Combo Pack 10.8 Frozen Novelties 9.2
Wine 7.4 Vitamins 6.6
Vitamins 4.7 Personal Soap/Bath Needs 6.4
Fresh Meat 4.6 Nuts 6.2
Prepared Foods-Dry Mixes 4.4 Yogurt 6.2
Vegetables & Grains-Dry 4.3 Juices & Drinks-Refrigerated 5.7
Pasta 3.7 Fresh Produce 5.2
Baking Mixes 3.5 Fragrances - Women 4.8
Juices & Drinks-Refrigerated 2.8 Seafood-Canned 4.7
Top 10 Fastest Growing Categories (Unit %-Change vs YAGO)
Source: Scantrack®, a service of The Nielsen Company; (U.S. FDM w/ Walmart) – *minimum $100 million in sales
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“Great Recession” Driving Fundamental Shifts in Consumer Buying
• Back to basics & increased at-home consumption continue
• Store brand success will continue
• Risk for mid-tier brands as retailers make room for expanded store brand
offerings & seek to eliminate clutter & simplify shopping experience
• Manufacturers move store brand manufacturing or direct-to-consumer options
• Can retailers make gains in categories with high marketing support and/or
high levels of innovation?
• Premium & discretionary brand segments and retailers need to
innovate & work harder than ever to differentiate & give consumers a
reason to buy
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In Summary
• The worst appears to be over…
• Restraint remains the new normal
• Home is where the heart and wallet is
• Value is top priority
• Store Brand growth continues
• Grocery consolidation intensifies