Bord Bia’s

Brexit Barometer 2018

Gwladys HallStrategic Insight Director, Kantar Worldpanel

All Change?

Fluid Times for UK Grocery

Gwladys Hall

Bord Bia

21 June 2018

4

ALTRUISM

Sugar & Plastic

The Triple-A of the UK Grocery Market

5

ACQUISITION

Retailer Landscape

ADAPTATION

Brand Growth

Gwladys Hall

ACQUISITION

Retailer Landscape

6

Acquisition?

7

As a profitability drive, Tesco UK CEO, Charles Wilson (ex Booker CEO) is closing Tesco Direct

8

Tesco-Booker mega merger is paying-off, so far

9Worldpanel Plus

Using our new Shoppix App

We’ve asked our panellists what they thought of this announcement

Worldpanel Plus. 21,545 results were collected.

A REAL PLUS

Spend share indexed vs national share

Asda & Sainsbury’s shoppers base are geographically complementary

Till Roll. 12 w/e 22 April 2018 10

Scotland

North

Midlands

East

London

South

Wales

127

61

136

76

118

4380

119

75

159

72

103

94

97

Asda share vs national average

Sainsbury’s share vs national average

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

91% of Households have shopped in Sainsbury’s or Asda last year

Till Roll – 52 w/e 22nd April 2018 (1 year continuous panel) 11

13mShoppers

of Both

20mJS

Shoppers

20mAsda

Shoppers

Number of shoppers

49%

51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Asda

Sainsbury's

Share of spend among

shoppers of both stores

UK Grocery growth & like for like inflation

Inflation now running at 2.1%

12

-4%

-2%

0%

2%

4%

6%

8%

10%

J M S J A A D M J N F J O J M A D A J N M J O F M S J A A D M J N M J O J M S J A A D M

Grocery inflation

Grocery growth

% change

20062005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

RT43 (Grocery). 2018 05. 12 w/e 20 May2017

Pre 2015 average:

Growth 4.2%

Inflation3.5%

No of Charts

Orientation

Chart Position 1

Chart Position 2

Chart Position 3

Chart Position 4

InsightBox

ChartDetailsBox

OptionalTextBox Deleted

OptionalFootnote

Y-Axis Heading Used

X-Axis Heading

2ndY-Axis Heading

Legend

Data Labels

Highlight

Benchmark

Time Series

Colour Palette

Call Out

Template Used

Background

Source

Source Sheet

Start Cell

IdenticalBlocksAcross

IdenticalBlocksDown

SimilarBlocksAcross

SimilarBlocksDown

PastedViews

Layout

AddYrYrDataLabels

Chevrons

-1

0

1

2

3

4

5

6

A S O N D J F M M A M J J A S O N D J J F M A M J J A S O N D J J F M A M J J A S O N D D J F M A M

Till roll growth

Grocers up +2.7%

Till Roll. KWP 2018 05. 12 w/e 20 May 18

% spend growthGrocers

2014 2015 2016 2017 2018

£+2.1%

Growth

Inflation

+2.7%

+1.1%

Frequency

Basket Size

-1.1%

13

No of Charts

Orientation

Chart Position 1

Chart Position 2

Chart Position 3

Chart Position 4

InsightBox

ChartDetailsBox

OptionalTextBox Deleted

OptionalFootnote

Y-Axis Heading

X-Axis Heading Used

2ndY-Axis Heading

Legend

Data Labels

Highlight

Benchmark

Time Series

Colour Palette

Call Out

Template Used

Background

Source

Source Sheet

Start Cell

IdenticalBlocksAcross

IdenticalBlocksDown

SimilarBlocksAcross

SimilarBlocksDown

PastedViews

Layout

AddYrYrDataLabels

Chevrons

Till roll market share and growth

vs a year ago

Till Roll. KWP 2018 05. 12 w/e 20 May 18

0 5 10 15 20 25 30 -10 -5 0 5 10 15

% spend share % spend growth

Share

Growth

2.7Grocers100.0

2.2Tesco27.7

1.0Sainsbury's15.7

2.8Asda15.4

2.9Morrisons10.5

6.7Aldi 7.3

1.5Co-Op6.0

0.3Waitrose5.1

10.4Lidl5.4

0.8Iceland2.1

-5.2Indeps & symbols1.8

12.7Ocado1.2

14

Till roll market share & growth

Vs one year ago

Share

Growth

£214m

£462m

Online

Supermarket

Convenience

High

street

Discount

UK Channel switching

Still about online & discounters

RT43 (Grocery). 2018 05. 12 w/e 20 May 17 15

Online share of UK grocery

Share growth slowing to under 0.5%pts per annum

16RST (Grocery). KWP 2017 13. 52w/e 31 Dec17

0

1

2

3

4

5

6

7

8

7.3

2016

6.8

2015

6.1

2014

5.1

2013

4.4

2012

Online

% FMCG spend

Projection:

12% by 2025(Kantar Worldpanel global ecommerce report)

7.5

2017

Aldi + Lidl UK market share

Till Roll. KWP 2018 04 12 w/e 22 Apr 2018 17

4.1%May 2008

12.7%May 2018

62% of the population shopping there in 12 weeks. Larger basket sizes too.

Aldi & Lidl UK growth

Slowing again

18

0

5

10

15

20

25

30

35

40

MMAMJ J A SOND J FMMAMJ J A SOND J FMMAMJ J A SOND J J FMAMJ J A SOND J J FMAMJ J A SOND J J FMAM

Lidl

Aldi

2016201520142013

% spend growth

2017

Till Roll. KWP 2018 05 12 w/e 20 May 2018

2018

UK Discounters vs. Bargain Stores

Smaller basket sizes mean bargain stores are 3 times smaller in sales

19RT43 (Grocery). 2018 05. 12w/e 20 May 18

+9%

£2.9bn

PENETRATION

62%

FREQUENCY

9

TRIP SPEND

VALUE

£19.17

+3%

£1.0bn

PENETRATION

54%

FREQUENCY

10

TRIP SPEND

VALUE

£6.35

ALDI & LIDL BARGAIN STORES

Adaptation

Brand Growth

20

Branded vs. Own label trend in the UK

Own label continues to grow much faster than brands, but gap is closing

21

-4

-2

0

2

4

6

8

10

MMJ S ND F A J AON JMM J S ND F AM J S N JMM J AOD F AM J S N JMA J AOD FMM J S N JMA J AOD JMM J S N J F A J AOD JMM

Own label

Brands% spend growth

20142013201220112010200920082007 2015 2016 2017

RT43 (Grocery). 2018 05. 12 w/e 20 May 18

2018

UK Own labels are diversifying and targeting new consumer based

Shopper choices save money, but also potentially trading up or going vegan!

22

Value

own label

Standard

own label

Brands Premium

own label

+3% +4% +8%+2%

RT43 (Grocery). 2018 05. 12 w/e 20 May 18

UK Brand Footprint

5 sector reports

23

Beverages Dairy Food Health and

beautyHomecare

Altruism

Sugar & Plastic

24

Altruism…

Shoppers and consumers want at least some of their health concerns dealt with by brands

Almost two thirds of people think manufacturers should reduce sugar in drinks

0 10 20 30 40 50 60 70

Q3. Which single action would you prefer that drinks companies carried out in response to the sugar tax? Base: 11,991 respondents

I don't know

Other action (please specify):

Make smaller sized bottles

Use different ingredients (e.g.

artificial sweeteners)

Reduce sugar in drinks

Increase the price

26

Shoppers and consumers want at least some of their health concerns dealt with by brands

Almost two thirds of people think manufacturers should reduce sugar in drinks

0 10 20 30 40 50 60 70

Q3. Which single action would you prefer that drinks companies carried out in response to the sugar tax? Base: 11,991 respondents

I don't know

Other action (please specify):

Make smaller sized bottles

Use different ingredients (e.g.

artificial sweeteners)

Reduce sugar in drinks

Increase the price

56 26

10

100

2014

43%

10

100

2018

33%

The sugar dial has moved

For a combination of reasons

Reformulation Innovation Rebalancing Consumers

27

Altruism…

28

Based on 21,545 Shoppix app responses, collected on 11 May 29

Worldpanel Plus. 21,545 results were collected.

A REAL PLUS

Using our new Shoppix App

We’ve asked our panellists how concerned they are

0 5 10 15 20 25 30 35 40 45

If food and drink

manufacturers could do one

thing to reduce plastic

waste, what would you ask

them to prioritise?

0Other (please

specify)

10Reducing the plastic

waste their own

business creates

7.2Funding projects to

find sustainable

packaging solutions

19Only using recycled

materials to make

packaging

42Making all of their

packaging recyclable

21Going plastic-free

with packaging

% respondents

Consumers are asking UK manufacturers to take the lead

Kantar Worldpanel LinkQ survey answered by 5,084 Worldpanel Plus panelists. Feb 2018 30

Sugar & Plastic

In Summary

Gwladys Hall 31

Retailer Landscape Brand Growth

Growth stable but slow

Own label central for retailers

Cheap yes, value even more

Fresh growth prioritised

Adaptation is king

Not going away

Retailers Consolidation

Changing channels

Inflationary pressure building

2018 & beyond challenges

Economic & political issues looming

UK yet to land a Brexit deal

Consumer concerns still to address

ACQUISITION ADAPTATION ALTRUISM

32

33

Thank you

Gwladys Hall

Tel.: +44 (0)7469 371 639

Gwladys.Hall@kantarworldpanel.com

For further information please contact: