IRELAND FMCG KEY TRENDS

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1 IRELAND FMCG KEY TRENDS Ma# Clark Commercial Director 3 rd Nov 2016

4 TOTAL FMCG VOLUME AND PRICE DRIVING OVERALL VALUE Value Volume Price MAT AUG % +1.3% +0.9% Source: Nielsen Strategic Planner, ROI Total Market Read MAT to Aug

5 DISCOUNTERS AND CONVENIENCE CONTINUE TO GAIN SHARE FROM MULTIPLES ROI CHANNEL SPLIT MAT, VALUE & CHANGE MAT &LBIMTH Channel, Share MAT Channel, % Growth BIMONTH 18 TOTAL DEFINED MARKET 2.2% 1.4% % 1.6% % 4.5% MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS -0.3% -1.3% Source: Nielsen Strategic Planner data to Jul/Aug 2016 Convenience = Gps, Fcts, Spec off licence, & independents 5

6 DISCOUNTERS AND CONVENIENCE CONTINUE TO GAIN SHARE FROM MULTIPLES ROI CHANNEL SPLIT MAT, VALUE & CHANGE MAT &LBIMTH Channel, Share DISC CONV 272 stores, +7% vs Jan 2015 Branded distribumon decreasing Forecast 21% share by 2020 Focus on stores Money worries easing Alcohol and ConfecMonery winning MULTIPLES + DUNNES ONLINE MULTIPLES MULTS ONLINE ConMnue to lose share Individual wins, collecmve losses Low penetramon, low conversion Focus on looking for offers Online model remains a challenge CONVENIENCE DISCOUNTERS Source: Nielsen Strategic Planner data to Jul/Aug 2016 Convenience = Gps, Fcts, Spec off licence, & independents 6

7 DISCOUNTERS EXPECTED TO REACH 21% SHARE BY 2020 Increasing store numbers, evolving range and innovamve campaigns will secure further growth 2015 FMCG channel value share of trade (ProjecZon) 17% 18% 21% 47% 45% 42% 36% 37% 37% MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS Strategic Planner MAT to August 2016 Scantrack/Market Track incl Discounters & Dunnes VALUE 7

9 MAJORITY IN THE REPUBLIC OF IRELAND THINK THE BREXIT DECISION WILL HAVE A NEGATIVE IMPACT ON THE IRISH ECONOMY Aher Britain has voted in favour of Brexit and will no longer be part of the European Union, how do you think this will affect the economy in the Republic of Ireland / Northern Ireland in the short term?" (Next 6 months) 52.0% NEGATIVE 63.2% NEGATIVE Total Respondents: 250 Time Range: From Jul 13, 2016 to Jul 18,

10 CONSUMER CONCERNS CHANGED POST-BREXIT As a result of the Brexit decision what is your biggest concern over the next 6 months (Please Mck more than one box) The Economy ImmigraZon PoliZcal stability Travel Work/life balance Job security Childrens' educazon and/or welfare Terrorism War Crime Health Global warming 5.6% 4.8% 4.4% 4.0% 3.6% 2.0% 2.0% 1.2% 15.2% 13.2% 11.2% 32.8% Rank Post Brexit Rank Pre Brexit Total Respondents: 250 Time Range: From Jul 13, 2016 to Jul 18,

11 FLUCTUATION IN STRENGTH OF STERLING WILL HAVE BIGGEST IMPACT. / Daily Exchange Rate NOV = = 1 June 23 rd 1.30 = = 1 Brexit vote Brexit Nov 2nd 1.11 = = 1 Source: European Central Bank to Daily Exchange Rate (closing) 11

12 IRISH CONSUMERS HAVE HIGH PROPENSITY TO TRAVEL TO NI TO SEEK BETTER VALUE Q Have you on any previous occasion travelled to Northern Ireland to avail of be#er value in order to save money on household expenses? Yes No Q As a result of changes in currency rates following the Brexit result will you consider traveling to Northern Ireland to avail of be#er value in order to save on household expenses? Maybe No Yes 46.0% 27.6% 42.4% 54.0% 30.0% Total Respondents: 250 Time Range: From Jul 13, 2016 to Jul 18,

13 HIGHER COST NON FOOD ITEMS LIKELY TO BE TOP OF CROSS-BORDER SHOPPING LIST Which of the following types of products would you travel to Northern Ireland to buy? (Please Mck more than one box) 9.6% 9.6% 8.0% 6.8% 5.6% 5.6% 5.6% 16.8% 14.8% 14.8% 12.4% 27.6% 27.6% 26.8% 35.2% 41.2% 41.2% 50.4% Clothing Alcoholic beverages Household appliances Health and beauty products Cars Pharmacy / medical items Non food items (detergents, households goods etc.) Toys Chocolate, sweets, biscuits Tobacco Items Petrol / Diesel Savory snacks, crackers, Frozen goods Fresh Food such as vegetables, fruits, fresh meat Non-alcoholic beverages Dairy (e.g. milk, cheese, yogurt) Non-alcoholic ready to drink beverages Chilled prepared/ready to eat meals Consumers are intending to save most in real terms ( ) on the most expensive product types Total Respondents: 250 Time Range: From Jul 13, 2016 to Jul 18, 2016 Big Ticket Items Standard Grocery 13

15 PROMOTIONS IMPACT ¾ OF IRISH SHOPPERS DECISIONS And Irish shoppers rank 2 nd in Europe for knowing the price of their regular bought items 18% Change stores based on which one has the best promo3ons 38% Ac3vely search for promo3ons 20% Will switch brands because of promo3ons 66% Always no3ce a price change on a regularly bought item 22% know the price of all items they buy regularly Source: Nielsen Ireland Shopper Trends

Copyright 2015 The Nielsen Company. ConfidenMal and proprietary. IT S A ZERO SUM GAME!

17 Copyright 2015 The Nielsen Company. ConfidenMal and proprietary. WHAT WOULD IMPROVE YOUR SHOPPING EXPERIENCE? Personalised coupons given at checkout Personalised promozons (List of products for discount) 42% 67% Pay by app 34% Tablets in store 32% Personalised product recommendazons 24% Digital shopping lists 24% Toluna QuickSurveys IRE n=101 What would improve your shopping experience when buying your groceries?

18 EXTRA NOISE AROUND YOUR PROMOTION REALLY GENERATES POSITIVE GAINS/UPLIFTS How much incremental* value can you expect? In Store AcZvaZon Secondary Displays In Store Sampling Category up to +6% Brand up to +14% Category +3% Brand +12% Category +7% Brand +32% Source: Nielsen Europe, MPA + Event Analysis, Benchmark Database *Incremental sales as a direct result of the in store ac3vity in those stores. 18

19 QUESTIONS?