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U.S. Retail Trends. Todd Hale SVP, Consumer & Shopper Insights May 3, 2013. Table of contents. Economic Update (3) Economic Divide (13 ) Gas Price Update (33) Consumer Confidence (42) Retailing Trends (49) Monthly gov’t sales (50) Same-store-sales (51)

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u s retail trends

U.S. Retail Trends

Todd Hale

SVP, Consumer & Shopper Insights

May 3, 2013

table of contents
Table of contents
  • Economic Update (3)
  • Economic Divide(13)
  • Gas Price Update (33)
  • Consumer Confidence (42)
  • Retailing Trends (49)
    • Monthly gov’t sales (50)
    • Same-store-sales (51)
    • Retail Channel Trends (62)
  • Retail Channel Shopping Behaviors (140)
  • Retail Channel Demographics (151)
  • Channel Blurring (165)
  • Retail Trends Summary (172)
confidence driven by many factors
CONFIDENCE DRIVEN BY MANY FACTORS

Which remain volatile, uncertain, but improving

HOUSING

EQUITY MARKETS

FUEL COSTS

INFLATION

GOVERNMENT

LABOR MARKETS

modest q1 rest of year gdp growth
Modest Q1 & rest of year GDP growth

U.S. Real GDP Percent Change from Preceding Period (seasonally adjusted at annual rates)

2008

2009

2010

2011

2012

2013

Sources: U.S. Department of Commerce, Bureau of Economic Analysis, April 26, 2013; *USA TODAY economic survey (estimate) of 50 top economists, Aug. 3-8, 2012

payroll tax whacks spending
“Payroll tax whacks spending”

Source: The Wall Street Journal

165k new jobs rate drops to 7 5
165K New Jobs & Rate Drops to 7.5%

April 2013 – Unemployed for longer than 27 weeks: 37.4%

U.S. Monthly Job Losses/Gains:

Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics - U.S. Department of Labor

underutilized paints tougher picture
Underutilized paints tougher picture

Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics - U.S. Department of Labor

inequities will impact products differently
Inequities will impact products differently

April 2013 Unemployment Rates – Seasonally Adjusted

Race/Ethnicity

Asian 5.1% (not seasonally adjusted)

White 6.7%

Hispanic (any race) 9.0%

Afr-American 13.2%

Age Group

20-24 13.1%

25-34 7.4%

35-44 5.8%

45-54 5.9%

55+ 5.5%

Education

Less than high school diploma 11.6%

High school grad; no college 7.4%

Some college, or assoc degree 6.4%

Bachelor degree and higher 3.9%

Gender (adults 20 +)

Women 6.7%

Men 7.1%

Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics - U.S. Department of Labor

misery index improving
Misery index improving

Misery Index = Unemployment Rate + Inflation

Source: U.S. Bureau of Labor Statistics; CPI non-seasonally adjusted, unempl. rate seasonally adjusted

greater misery for young less educated
Greater misery for young & less educated

Misery Index = Unemployment Rate + Inflation

Source: U.S. Bureau of Labor Statistics; CPI non-seasonally adjusted, unempl. rate seasonally adjusted

housing future renting and downsizing
“Housing Future: Renting and Downsizing”

The Associated Press reported on Feb. 11, 2012—

Recent declines in housing wealth may be reducing consumer spending between $200 billion and $375 billion per year.

Ben Bernanke

The Wall Street Journal reported on May 15, 2012—

Be it ever so humble, there’s no place like a rented apartment.

Less space will change spending patterns… Food and nondurable retailers may find shoppers making more visits but buying less each time because of fewer cupboards in their homes.*

*The Demand Institute is jointly operated by the Conference Board & Nielsen Holdings N.V. - Source: Associated Press, The Wall Street Journal & Bloomberg News (photo)

value stays as income goes
Value stays as income goes

Decline in median household income in 9 of last 12 years

Median household income in 2011 inflation adjusted dollars

Source: U.S. Census Bureau

snap gains despite declining unemployment
SNAP gains despite declining unemployment
  • SNAP: Monthly Participation (Persons)
  • Jan 2009: 31,983,716
  • Jan 2013: 47,772,108 +49.4%
  • Unemployed Persons (seasonally adjusted)
  • Jan 2009: 12,079,000
  • Jan 2013: 12,332,000 +2.1%

SNAP = Supplemental Nutrition Assistance Program

Source: United States Department of Agriculture Food and Nutrition Service; Bureau of Labor Statistics, Current Population Survey

snap gains even with growing employment
SNAP gains even with growing employment
  • SNAP: Monthly Participation (Persons)
  • Jan 2009: 31,983,716
  • Jan 2013: 47,772,108 +49.4%
  • Employed Persons (non-farm, seas. adjusted)
  • Jan 2009: 133,631,000
  • Jan 2013: 134,839,000 +0.9%

SNAP = Supplemental Nutrition Assistance Program

Source: United States Department of Agriculture Food and Nutrition Service; Bureau of Labor Statistics, Current Population Survey

1 in 5 kids in u s living in poverty
“1 in 5 Kids in U.S. Living in Poverty”
  • About 2.7 million more children lived with an unemployed parent during a typical month [during 2012] compared with 2007, a 71 percent increase.
  • Some 2.8 million children lived with a parent who was out of work for six months or longer.
  • About 9 percent of all children live with unemployed parents, compared with 5 percent before the recession.
  • More than 21.6 million children receive subsidies, an increase of 8.8 million from  2007.

National JournalDec. 5, 2012

Source: National Journal & AP Photo (Mel Evans)

greater spending power as income rises
Greater spending power as income rises

Source: Nielsen Homescan, 52 w/e 12/29/2012 - excludes gas-only or Rx-only trips

because of greater spend more per trip
Because of greater spend more per trip

Source: Nielsen Homescan, 52 w/e 12/29/2012 - excludes gas-only or Rx-only trips

retailing at the extremes
Retailing at the extremes

Channel Preference: % Household Penetration

Income < $25K Income $200K+

Source: Nielsen Homescan, 52 w/e 12/29/2012 - excludes gas-only or Rx-only trips

diverse banner attraction
Diverse Banner attraction

Banner Preference: % Household Penetration

Income < $25K Income $200K+

Source: Nielsen Homescan, 52 w/e 12/29/2012 - excludes gas-only or Rx-only trips

innovating for lower price point
Innovating for lower price point

Poverty is returning to Europe… Unilever has already started to change the way it sells some of its products. In Spain, the company sells Surf detergent in packages for as few as five washes, while in Greece, it now offers mashed potatoes and mayonnaise in small packages, and has created a low-cost brand for basic goods such as tea and olive oil.

The Telegraph (UK)Aug. 27, 2012

Source: Heinz Q2-FY2012 Earnings Webcast (11/18/2011); P&G; The Telegraph (UK)

price wars
Price wars

The average price gap has been 17% against food competitors and 20% against health and wellness competitors, …including a gap of…15% against Publix.

Supermarket NewsOct. 12, 2012

Source: Supermarket News, The Birmingham News, Christie Dedman/News Staff

food lion challenging walmart
Food Lion challenging Walmart

Source: http://www.foodlion.com/Savings/Promotions/FoodlionVsWalmart

price freezes
Price freezes

Source: Wegmans, Weis Markets, Kroger, Giant Eagle, Progressive Grocer

price matchin g
Price matching

Source: Target

breaking it down to cost per serving
breaking it down to cost per serving

Cost perserving

Source: Hy-Vee

expanding outside their core
Expanding outside their core

Bluebird addresses the need for an affordable, transparent way to manage everyday finances, with premium features, no minimum balance, monthly, or overdraft fees

Walmart

Source: Walmart

restaurants fight back with discounts
Restaurants fight back with discounts +

Source: Wendy’s, Olive Garden, Red Lobster

winning with solutions not deals
Winning with solutions – not deals

retailers achieved a 19.2% average incremental increase in units sold across the displays and 20.5% in dollar sales. Dairy products scored even higher…The gains were recorded without promotional pricing or extra marketing

Supermarket NewsJun. 2, 2012

Source: Supermarket News; Innovation Center for U.S. Dairy’s Dairy Meal Solutions: Merchandising Works study (April 2012)

value a balance between price benefits
Value a balance between price & benefits

Value Consumer ≠ Price Value Consumer = Benefits/Price

Mainstream CoffeePremium Coffee

Average price 90% higher

Dollar sales -3% Dollar sales +6%

Pound sales -4% Pound sales +4%

Soluble/Instant Coffee Coffee PodsAverage price 130% higher Average price 462% higher

Dollar sales +2% Dollar sales +103%

Pound sales -2% Pound sales +101%

Convenience

Enhanced

Convenience

Source: Nielsen Scantrack, Total U.S. - All Outlets Combined, 52 weeks ending 12/29/12 (vs. year ago), UPC-coded items

gas prices now on downward path
Gas prices now on downward path

Source: U.S. Energy Information Administration - Monthly U.S. Regular All Formulations Retail Gas Prices (2011, 2012 & 2013) - prices include all taxes

rising prices stall below year ago
Rising prices stall & below year ago
  • Typical Consumer Reactions:
  • Trip compression
  • Eating out less
  • Value buying
  • Increased coupon usage

Source: Nielsen Gas Impact Homescan Survey; U.S. Energy Information Administration - Weekly U.S. Regular All Formulations Retail Gas Prices (2012 & 2013) - prices include all taxes

regional prices differences but all down
regional prices differences, but all down

Price differences since last year(week ending 4/30/2012 versusweek ending 4/29/2013)

  • Total US: -31¢
  • New England: -41¢
  • Gulf Coast: -39¢
  • Central Atlantic: -38¢
  • Lower Atlantic: -36¢
  • West Coast: -32¢
  • Rocky Mountains: -30¢
  • Midwest: -20¢

Source: U.S. Energy Information Administration - Weekly U.S. Regular All Formulations Retail Gas Prices (2012 & 2013) - prices include all taxes

winning with gas rewards
Winning with gas rewards

Are you …buying more gas at locations because of incentives tied to spending levels at GROCERY store where you shop?

…up to $2.20/gallon!

One-third of households shopping grocery to save on gas

Note: Stop & Shop gas rewards points are valid for 30 daysSource: Nielsen Homescan Surveys; Stop & Shop

other channels not gaining ground
Other channels not gaining ground

Other than GROCERY, are you …buying more gas at locations because of incentives tied to spending levels at that store where you shop?

Source: Nielsen Homescan Survey; Rutter’s, Turkey Hill, Speedway

gas rewards key part of loyalty programs
Gas rewards key part of loyalty programs

Source: Company websites & LogoBase

bp launching new loyalty program
BP launching new loyalty program

BP Driver Rewards

BP is the first major oil company to launch a “non-payment” loyalty program that rewards fuel purchases with fuel cents-per-gallon rewards. Instead of requiring consumers to purchase additional convenience store items, BP Driver Rewards gives fuel purchasers rewards for the quality fuel that they regularly purchase.

NACS OnlineFeb. 18, 2013

Source: NACS Online

vehicle charging stations
Vehicle charging stations

Source: MyFord Mobile, www.ford.com/technology/electric/evready, www.theevproject.com & company websites

the ups downs of consumer confidence
The ups & downs of consumer confidence 

Consumer Confidence Index – January 2002 through April 2013

90

68

25

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: The Conference Board

improving but still not at healthy level
Improving but still not at healthy level

Nielsen U.S. Consumer Confidence Index

+7pts

avg.

90

avg.

83

Source: Nielsen Global Consumer Confidence & Opinion Survey through 1Q’13

saving paying off debt still priorities
Saving & paying off debt still priorities

Once you have covered your essential living expenses, what do you do with your spare cash? I spend it on…

28% reporting no spare cash

No Change

1Q13 vs. 4Q12

Despite increase in cash strapped consumers, claimed discretionary spending on rise

Source: Nielsen Global Consumer Confidence & Opinion Survey through 1Q’13

economy 1 concern fuel concerns rise
Economy #1 concern; fuel concerns rise

What are your biggest concerns over the next six months…

Source: Nielsen Global Consumer Confidence & Opinion Survey through 1Q’13 (versus previous quarter)

consumer outlook remains stubbornly weak
CONSUMER OUTLOOK REMAINS STUBBORNLY WEAK

Percent who think the U.S. will be out of a recession in the next 12 months

MostOptimistic

MostPessimistic

25%

10%

Source: Nielsen Global Consumer Confidence & Opinion Survey through 1Q’13

pragmatic behavior continues but less intense
Pragmatic behavior continues, but less intense

Source: Nielsen Global Consumer Confidence & Opinion Survey through 1Q’13

retailing trends
RETAILING TRENDS

Competition heats up!

march retail sales fall
March retail sales fall

Monthly % change in Retail Trade & Food Services, ex Auto – seasonally adjusted

Recession

Recovery

Source: U.S. Census Bureau (44Y72: Retail Trade & Food Service, ex Auto)

economic divide execution drives success
Economic divide & execution drives success

Same-Store-Sales – average growth – latest 52 weeks

Strong affluent shopper attraction

Strong lower income attraction

No strong attraction

Source: Company press releases; monthly or quarterly news releases – excluding gas

economic divide execution drives success1
Economic divide & execution drives success

Same-Store-Sales – average growth

High End Retailer Low End Retailer

Note: Red arrows indicate worse than 2009; green arrows indicate largest positive swing in performance since 2009

Source: Company press releases; monthly or quarterly news releases – excluding gas

whole foods kroger delivering
Whole Foods & Kroger delivering

% Change in Same-Store-Sales for last six reported quarters

Source: Company press releases (excluding gas)

only publix posting consistent gains
Only Publix posting consistent gains

% Change in Same-Store-Sales for last six reported quarters

Source: Company press releases (excluding gas)

target walmart posting gains
Target & Walmart posting gains

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas)

walgreens rite aid slip in feb mar
Walgreens & Rite Aid slip in Feb & Mar

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas)

growth slows for top three chains
Growth slows for top three chains

% Change in Same-Store-Sales for last six reported quarters

Source: Company press releases (excluding gas)

growth from costco sam s club
Growth from Costco & Sam’s Club

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas

h igher end chains performing better
Higher-end chains performing better

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas)

home depot driving stronger performance
Home Depot driving stronger performance

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas)

toys for people not winning like toys for pets
Toys for people not winning like toys for pets

% Change in Same-Store-Sales for last six reported months or quarters*

Source: Company press releases (excluding gas)

value convenience winning
Value & convenience winning

All Departments – Dollar Sales & Trend

Supermarkets

Value*

C-Stores

Drug Stores

Low Growth High Growth

Total measured channels: $761 Billion & up 2.6%

Source: Nielsen Scantrack, Total U.S., 52 weeks ending 03/16/2013 (vs. year ago), UPC-coded; *Club Stores, Dollar Stores, Mass-Merchandisers, Supercenters, & Military

value convenience gain w expansion
Value & convenience gain w/expansion

U.S. Store Counts

67% + of growth from niche formats

Expansion from all formats but Mass in 2012

Source: Nielsen TDLinx

mixed growth from specialty formats
Mixed growth from specialty formats

U.S. Store Counts

Expansion from all formats but Electronics & Office Supply in 2012

Source: Nielsen TDLinx

walmart target leading expansion
Walmart & Target leading expansion

U.S. Store Counts

  • Walmart to open 125 supercenters & between 95 & 115 smaller-format stores
  • Kroger eyeing expansion
  • Delhaize closing 33 Sweetbay Stores
  • Publix expanding in Knoxville & Charlotte

Expansion from Walmart, Target, Delhaize, Ahold in 2012

Source: Nielsen TDLinx - Counts reflect corporate-owned grocery stores

expansion from most regional grocers
Expansion from most regional grocers

U.S. Store Counts

Expansion from all formats but A&P and Save Mart in 2012

Source: Nielsen TDLinx

edibles dominate top selling categories
Edibles dominate top selling categories

Top Selling Supermarket Categories ($ in billions)

Source: Nielsen Scantrack, Total U.S. All Outlets Combined (plus Convenience) - 52 weeks ending 03/16/2013 (vs. year ago); UPC-coded

fastest growing categories mostly edibles
Fastest growing categories mostly edibles

Fastest Growing Supermarket Categories* (Dollar Trend)

But faster growth outside of supermarkets

Source: Nielsen Scantrack, Total U.S.; All Outlets Combined (plus Convenience) *Categories w/ sales of $50 million+ in the Food Channel - 52 weeks ending 03/16/2013 (vs. year ago); UPC-coded

winn dixie unveils new format
Winn-Dixie unveils new format

The store’s transformation goes beyond the physical facilities – most notably the farmer’s market at the store’s entrance – to what’s inside the store and how it’s sold.

Source: Winn-Dixie

winco takes gamble in las vegas
WinCo takes gamble in Las Vegas

Source: MorningNewsBeat.com; Las Vegas Sun/Steve Marcus (photos – March 4, 2012)

new banner working in chicago
New banner working in Chicago

CEO Bob Mariano stated on their Q2 earnings call, “we are becoming even more confident that the Chicago area can support at least 25 to 30 Mariano stores.”

Eight stores currently open inthe Chicago area.

Rendering of a proposed Mariano’s Fresh Market planned for Frankfort – the first in Chicago’s south suburbs

Source: Mariano’s Fresh Market; Artist rendering for Frankfort, IL store via Chicago Tribune

celebration central
Celebration central

201central is a new approach for Harris Teeter, and we believe that 201central will become your central place to find everything you need to make all your celebrations the best.

201Central.com

Source: Harris Teeter

byerly s opens pet store
Byerly’s opens pet store

Bone Marché has a separate entrance and welcomes pets on leashes. The store features a ‘bone bar,’ a variety of specialty pet-food brands and refrigerated and frozen pet foods.

Supermarket News Sep. 20, 2012

Source: Byerly’s

successful retailers have variety of boxes
Successful retailers have variety of boxes

% of U.S. Store Count Expansion in the Top 20 Expansion Chains – 2012 versus 2007

13,400 new stores

But fastest expansion from small formats

Source: Nielsen TDLinx

smaller formats lead chains w most stores
Smaller formats lead chains w/most stores

U.S. Store Counts for 2012

C-Store

Dollar

Drug

Grocery

Mass

Source: Nielsen TDLinx

small format growth but not the only box in town
Small Format Growth, but not the only box in town

Increases in actual U.S. Store Counts – 2012 versus 2007

C-Store

Dollar

Drug

Grocery

Mass

Source: Nielsen TDLinx

banner for sale
Banner for sale

Fresh & Easy fail: Tesco exits U.S. after profit tanks 96%

Los Angeles TimesApr. 17, 2013

Tesco leaving US, but will try to sell its Fresh & Easy stores… They don't have any plans to close stores… They have already received bids for the business, including ones from groups wanting to purchase Fresh & Easy as an operating business…

‘Our focus remains on our customers, and we've even launched a new marketing campaign.’

San Jose MercuryApr. 25, 2013

Source: Los Angeles Times & San Jose Mercury

walmart s small formats
Walmart’s small formats

Wal-Mart…expects to have 500 Neighborhood Markets operating within three years — more than double the 240 it currently has… Wal-Mart Express stores ‘comped better than we had imagined as they hit their first year, and they reached profitability faster than we thought they would. However, the return is not where the other formats are…’

Supermarket NewsOct. 22, 2012

Walmart Canada opened its prototype small urban Supercentre...90,000 square feet–allows Walmart to build Supercentres on half the land normally required.

Supermarket NewsJan. 27, 2012

Source: Supermarket News, Canadian Grocer, Walmart, Arkansas Online, WBEZ

target small urban format focus
Target small urban format focus

a new era for downtown residents

Seattlepi.comJul. 23, 2012

CityTarget:

Chicago (July 2012)

L.A. (July 2012)

Seattle (July 2012)

L.A. (Oct. 2012)

San Francisco (Oct. 2012)

L.A. (March 2013)

Portland, OR (July 2013)

San Francisco (Oct. 2013)

Source: Target; Photos: Sofia Jaramillo / SEATTLEPI.COM, Los Angeles Times, Antonio Perez / Chicago Tribune

specialty invests in small too
Specialty invests in small Too

OfficeMax, Petco, Sports Authority, Cabela’s are among those with small-store strategy

Source: Milwaukee Business Journal, Petco, Cabela’s & Sports Authority

toys r us holiday pop ups in macy s
“Toys”R”Us holiday pop-ups in Macy’s

Macy’s and Toys “R” US partner… Companies offer Toys“R”Us Express-branded shops in 24 Macy’s locations in major markets nationwide beginning in mid-October and continuing through mid-January

Macy’s Inc. Oct. 10, 2012

Source: Macy’s, Toys”R”Us

heb format entertains delights
HEB format entertains & delights

H-E-B Montrose Patio Performances offer live music every weekend.

H.E. Butt Grocery Co…. opened a new store in the Montrose section of Houston Wednesday that will convert part of its parking lot to an outdoor events plaza on weekends for concerts, movies and artisan markets… the chain's first food truck that will serve gourmet items Fridays and Saturdays in the parking lot.”

Supermarket News Nov. 16, 2011

Source: H-E-B, Supermarket News, Houston Chronicle/Gary Fountain (photo)

foodie entertainment
Foodie entertainment

Hy-Vee’s first in-store, sit-down restaurant, called Market Fresh Grille, as well as a number of other firsts, many of which involve foodservice, prepared foods and value-added products that tie into cooking.

Supermarket NewsSep. 3, 2012

Source: Hy-Vee; Des Moines Register/David Purdy; Supermarket

hunger for natural gourmet low prices
Hunger for natural/gourmet & low prices

U.S. Store Counts

Expansion from all in 2012

Source: Nielsen TDLinx

fresh market has big expansion plans
Fresh Market has big expansion plans

Currently operates 130 stores in 25 states; 19 to 22 new stores planned for FY 2013

We are extremely excited about our pipeline and our store openings. We continue to accelerate store openings and believe that 500 stores is a reasonable indication of market opportunity for The Fresh Market in the United States.

Source: The Fresh Market

smaller formats better prices
Smaller formats & better prices

The grocery chain, which mostly entices young, trendy city dwellers, is now moving into smaller, suburban areas where its new, smaller stores are seeing stronger returns. But to make it work, Whole Foods has to rid itself of its top-dollar reputation… Whole Foods has just about 317 locations, and plans to grow to 1,000 stores—though probably not in this decade, executives said. The new smaller stores will be crucial to reaching that goal.

The Wall Street JournalFeb. 15, 2012

Source: Whole Foods & The Wall Street Journal

consumers pick aldi as low price leader
Consumers pick Aldi as “low-price leader”

Source: Dallas Morning News (full page ad on Sunday, Aug. 5, 2012) & Aldi-US.com

save a lot expanding to engage shoppers
Save-A-Lot expanding to engage shoppers

We have invested in our asset base, adding 29 Save-A-Lot stores this year, 19 of which are located in food deserts and completing 49 traditional remodels… we now expect to open approximately 50 to 60 locations this fiscal year.

Craig Herkert, CEOSUPERVALU’s Q3 2012 Earnings CallJan. 11, 2012

Source: Save-A-Lot

expanding no frills formats
Expanding no-frills formats

Operates six stores in MI; plans for 6 to 8 more stores in 2013 in Detroit Metro! Looking at expanding beyond MI, too

Operates 56 stores in PA, NJ, OH

Operates six stores in TX

Operates one store in PA

Operates 13 stores in IN, KY, OH; opening first store in IL in Spring 2013

Operates six stores in OH & PA

Source: Bottom Dollar, Joe V’s Smart Shop, Valu Land, Valu King, Good Cents; Ruler Foods

fresh is in
Fresh is in!

Source: Company websites

1 131 target stores w expanded food
1,131 Target stores w/expanded food

…the majority of our stores now reflect our newly reinvented general merchandise format. This layout is much more appealing to our guests and incorporates a deeper food assortment, merchandise reinventions across the store, and a more visually compelling shopping environment.

Target Q4 2012 Earnings CallFeb. 27, 2013

Source: Target - Photos: Bill Porter/Milwaukee Journal Sentinel & Bill Wippert/Buffalo News

target steps up to the plate
Target steps up to the plate

Expands Cooking & Kitchenware Categories

“Target believes these transactions present a strategic growth opportunity”

Source: Company websites & Supermarket News

outdoor dining at its best
Outdoor dining at its best?

Atlanta Food Truck Park & Market: “2000 square feet of both covered and open-air dining, the park features 1.5 acres of green space with a playground, picnic area, bocce ball court and a lawn for movies and concerts… Food trucks may number 10-15 for any given meal, with different trucks for lunch and dinner and possibly breakfast.

Atlanta Journal-ConstitutionApr. 11, 2012

Source: Atlanta Food Truck Park & Market

making mealtime more meaningful
Making mealtime more meaningful

To help you make your meals more meaningful, we've provided a selection of articles and studies that offer incredible insight into the American family table.

Barilla

Source: Barilla

celebrity draw driving strong growth
Celebrity draw driving strong growth

$ %Change vs. Year Ago

Unit %Change vs. Year Ago

2011

2012

2011

2012

Source: Nielsen Scantrack, Total U.S. – All Outlets Combined; food & non-alcoholic beverages - 52 weeks ending 12/24/2011 & 12/22/2012 (vs. year ago) – Note: Select brands only; Logos from company websites

grocery brands aim to grow restaurant sales
Grocery brands aim to grow restaurant sales

Source: My 99.3; AP/Damian Dovarganes; chachingonashoestring.com

retailers partner with restaurants caf s
Retailers partner with restaurants & cafés

Coinstar’s new Rubi coffee kiosk began rolling out in the grocery, drug & mass merchant retail stores featuring Seattle’s Best Coffee beverages with price points starting at $1. Approximately 500 kiosks to open by the end of 2012 & thousands in next several years.

Source: Coinstar & Seattle’s Best

slide99
Source: http://www.restaurant.org/Downloads/PDFs/News-Research/index/RPIJan2013.pdf
top chains dominate
Top chains dominate

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 50 (Aug. 2012)

more new stores from 2nd tier chains
More new stores from 2nd tier chains

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 50 (Aug. 2012)

a few new stores from 3rd tier
A few new stores from 3rd tier

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 50 (Aug. 2012)

a few new stores from 4th tier
A few new stores from 4th tier

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 50 (Aug. 2012)

strong growth outside of the u s
Strong Growth Outside of the U.S.

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 30 (March 2013)

growth outside of the u s 2 nd tier
Growth Outside of the U.S. – 2nd tier

Increase in units from 2010

Decrease in units from 2010

Source: QSR Magazine’s The Top 30 (March 2013)

it s just not about the food
It’s just not about the food

Source: Kroger’s Fred Meyer & Facebook.com/BombayCompany

lots of u s traffic for gift cards
Lots of U.S. traffic for gift cards

Gift Card Mall, with access to 160 million customer visits each week, is available through a network of leading grocery stores, big box, convenience, pharmacy, specialty stores, Internet retailers and mobile channels, including GiftCardMall.com.

Blackhawk Network, Feb. 7, 2013

Source: Blackhawk Network (quote); TribLocal & Facebook.com/GiftCardMall (photos)

expansion from leading drug club chains
Expansion from leading drug & club chains

U.S. Store Counts

Expansion from all but Rite Aid in 2012

*Drug chains include other owned banners (i.e., Walgreens includes Duane Reade and Happy Harry; CVS includes Careplus and Longs; Rite Aid includes Save-A-Lot RA) Source: Nielsen TDLinx

the warehouse club treasure hunt
The warehouse club treasure hunt

Source: Company websites

club membership fees
Club membership fees
  • Costco
  • Executive, $110
  • Business, $55
  • Gold Star, $55
  • Sam’s Club
  • Advantage Plus, $100
  • Advantage, $40
  • Business Plus, $100
  • Business, $35
  • BJ’s
  • BJ’s Rewards, $100
  • Business, $50
  • Inner Circle, $50

Source: Company websites

club coupons trial programs
Club coupons & trial programs

Source: Costco, Sam’s Club, BJ’s

in store kiosks social networks
In-store kiosks & social networks

Source: Sam’s Club; Wall Street Journal

merchandising wide variety of categories
Merchandising wide variety of categories

Have you noticed Walgreens online ad includes more pages than their print edition?

Source: Company websites

females beauty a big draw for drug
Females & beauty a big draw for drug

Walgreen Co. has begun leveraging Duane Reade’s successful Look Boutique concept in select Walgreens drugstores. They average 1,200 to 2,000 square feet & each has a minimum of five beauty advisers

CVS closing Beauty 360 locations & e-commerce site in May 2012 to “focus on the growth and development of beauty at CVS/pharmacy”

Source: Company websites, Drug Store News & Chicago Tribune

shaking up the box
Shaking up the box

Walgreens expanding “flagship” store concept in the U.S. & Puerto Rico

  • sushi chef
  • barista, juice bar, soda fountain
  • 700 fine wines
  • manicures
  • and, more!

Source: Walgreens, Business Wire, Los Angeles Times

non edibles dominate top selling categories
Non-edibles dominate top selling categories

Top Selling Drug Store Categories ($ in billions)

Source: Nielsen Scantrack, Total U.S. All Outlets Combined (plus Convenience) 52 weeks ending 03/16/2013 (vs. year ago), UPC-coded

fastest growing categories mostly edibles1
Fastest growing categories mostly edibles

Fastest Growing Drug Store Categories* (Dollar Trend)

Is your category a trip driver or a basket builder?

Source: Nielsen Scantrack, Total U.S., All Outlets Combined (plus Convenience) *Categories w/ sales of $50 million+ in the Drug Channel - 52 weeks ending 03/16/2013 (vs. year ago), UPC-coded

expansion from most top c store chains
Expansion from most top c-store chains

U.S. Store Counts

Slower or declining growth for most oil company outlets

Source: Nielsen TDLinx

expansion from most 2nd tier c store chains
Expansion from most 2nd tier c-store chains

U.S. Store Counts

Expansion from all but Pantry, Kroger, Hess, RaceTrac in 2012

Source: Nielsen TDLinx

expansion from most 3rd tier c store chains
Expansion from most 3rd tier c-store chains

U.S. Store Counts

Expansion from all but Wilcohess & Delek in 2012

Source: Nielsen TDLinx

dominate tobacco big in beverages
Dominate tobacco & big in beverages

Top Selling C-Store Categories ($ in billions)

Source: Nielsen Scantrack, Total U.S. All Outlets Combined (plus Convenience) - 52 weeks ending 03/16/2013 (vs. year ago), UPC-coded

stronger growth most are edible
Stronger growth & most are edible

Fastest Growing C-Store Categories* (Dollar Trend)

Consumers are voting– convenience matters

Source: Nielsen Scantrack, Total U.S., All Outlets Combined (plus Convenience) *Categories w/ sales of $50 million+ in C-Store Channel - 52 weeks ending 03/16/2013 (vs. year ago), UPC-coded

big global presence
Big global presence

1927 – First store

1952 – 100 stores

1963 – 1,000 stores

1984 – 10,000 stores

2003 – 25,000 stores

2010 – 40,000 stores

2012 – 49,500 stores

7-Eleven, Inc. achieved record store growth in 2012 and expects the number of 7-Eleven stores worldwide to pass the 50,000-store mark by the end of the first quarter.

7-ElevenFeb. 26, 2013

There are more than 10,000 7-Eleven stores in U.S., Canada & Mexico

Source: 7-Eleven

7 eleven healthy options
7-Eleven healthy options

By 2015, the retailer aims to have 20 percent of sales come from fresh foods in its American and Canadian stores, up from about 10 percent currently

The New York TimesDec. 24, 2012

Source: Tony Cenicola/The New York Times

a fun place to go for food
A fun place to go for food

Source: Public Domain (store interior), Company Website (small images), Gary M. Baranec/Associated Press (touch screen)

kroger supersizes c store format
Kroger “supersizes” c-store format

Kroger supersizes latest Turkey Hill market to be more like grocery stores… At 6,800 square feet, it is almost 75 percent bigger than the typical 4,000-square-foot Turkey Hill. The goal is to be more like a grocery store – wider product selection, fresh produce and meat – but still with the grab-and-go hallmarks of a gas station. It also has new breakfast, lunch and dinner menus that include build-your-own bistro-style sandwiches, wraps, bowl, fried chicken and pizza.

Columbus Business First Sep. 14, 2012

Source: Turkey Hill Market

complete meals to go
Complete meals to go

Source: Convenience Store News & Nice N Easy

drive thru service
Drive-thru service

Most of the 3,000 items sold in the store are available from the drive-thru, including grocery staples such as bread, eggs and cereal.

CSP Daily News Nov. 29, 2011

Today, only two Cumberland Farms locations feature a drive-thru, but there are plans to add a half dozen more.

Convenience Store NewsJun. 8, 2012

Source: CSP Daily News, Convenience Stores News, Boston.CBSLocal.com

c stores try vending format
C-stores try vending format

About the size of an enclosed bus stop, the robotic kiosk is a self-contained, refrigerated vending machine that can carry up to 200 items. It is restocked daily with such staples as toiletries, cleaning supplies, and perishables that include fresh milk, bread, fruit, and ground beef. It accepts cash, debit cards, credit cards, and federal supplemental nutrition-assistance program cards.

Toledo Blade Feb. 15, 2012

Source: Shop 24 Global LLC on Facebook

opportunities for new locations
Opportunities for new locations

Source: Shop 24 Global LLC on Facebook & PropertyManagementInsider.com (Tim Blackwell/photo)

rapid expansion within dollar channel
Rapid expansion within dollar channel

U.S. Store Counts

Fred’s testing smaller box Fred’s with pharmacy; plans to pilot four more GetWell Drug & Dollar concept stores by end of 2013

Expansion from all in 2012

Source: Nielsen TDLinx

increased brand focus broader price points
Increased brand focus; broader price points

Source: Family Dollar & Dollar General

seizing the moment adding stores
Seizing the moment & adding stores

We hit our target of opening 625 new stores and exceeded our target with combined remodels and relocations of 592 stores in 2012, increasing our selling square footage by 7%. Most of this growth was in our existing 38 states with new store openings in 2 new states. A milestone for the company in 2012 was the expansion of our footprint into California, opening our 10,000th store in Merced back in March of 2012. We also opened our first 3 stores in Massachusetts. We now have more than 100 stores in both the Dollar General Market and Dollar General Plus formats.

Dollar General Q4 2012 Earnings Call Mar. 25, 2013

Source: Dollar General

2 600 items online spanish website too
2,600 + items online; Spanish website too!

Online items sold with minimum quantities; case prices available; limited free in-store pick-up

Source: Dollar Tree

store expansion closings to drive growth
Store expansion & closings to drive growth

ABC NewsDec. 11, 2012

Believe it or not, we can still open a lot of stores…Particularly in California where we just opened a store a year ago… this is probably a 1,000-store state.

Right now, [CEO Howard] Levine overseas an empire of 7,550 stores nationwide – and counting. Family Dollar opened 500 new stores this year – more than one per day.

Family Dollar Stores, Q1 2013 Earnings call Jan. 3, 2013

Source: Family Dollar & The Charlotte Observer

adding more name brands tobacco
Adding more name brands & tobacco

[Tobacco is] in 6,600 stores…we've got a few hundred stores more to go that we're going to add tobacco this fiscal year.

Family Dollar Stores, Q1 2013 Earnings call Jan. 3, 2013

Source: Family Dollar

retail channel shopping behaviors
Retail Channel Shopping Behaviors

The data behind these trends come from syndicated Homescan® reports which are available for licensing. Please contact Todd Karmel (todd.karmel@nielsen.com) for details.

consumer acceptance of value
Consumer acceptance of value

% Household Penetration

*Includes Kmart, Target & Walmart;

**Note: Conv/Gas channel behaviors understated because of the high level of gasoline-only buys & purchases of immediate consumables

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

value channels grabbing trips
Value channels grabbing trips

Trips Per Household

Long-term decline in Grocery & Mass trips, but holding steady over the past couple of years

*Includes Kmart, Target & Walmart;

**Note: Conv/Gas channel behaviors understated because of the high level of gasoline-only buys & purchases of immediate consumables

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

big box stores drive big baskets
Big box stores drive big baskets

Average $ Basket Ring

*Includes Kmart, Target & Walmart;

**Note: Conv/Gas channel behaviors understated because of the high level of gasoline-only buys & purchases of immediate consumables

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

only pet is gaining shoppers
Only pet is gaining shoppers

% Household Penetration

Store closings; online & big box retailers driving shopper compression

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

low frequency some reductions
Low frequency & some reductions

Trips Per Household

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

shopping baskets vary in specialty
Shopping baskets vary in specialty

Average $ Basket Ring

Source: Nielsen Homescan, excludes gas-only or Rx-only trips

trips soft basket size growth
Trips soft & basket size growth

Period included Christmas

All Channel Shopping – Trends

4-weeks ending

Source: Nielsen Homescan, excludes gas-only or Rx-only trips (vs. year ago)

dollar trip growth others soft or flat
Dollar trip growth; others soft or flat

Channel Shopping Trip Trends

4-weeks ending

Source: Nielsen Homescan, excludes gas-only or Rx-only trips (vs. year ago)

inflationary pressures subsiding
Inflationary pressures subsiding

$ Basket Ring Per Trip Trends

4-weeks ending

Source: Nielsen Homescan, excludes gas-only or Rx-only trips (vs. year ago)

trip decline in discretionary channels
Trip decline in discretionary channels

Retail Channel Shopping Trip Trends

4-weeks ending

Source: Nielsen Homescan, excludes gas-only or Rx-only trips (vs. year ago)

opportunities across economic divide
Opportunities across economic divide

Distribution of Dollars – Household Income

Source: Nielsen Homescan, Total U.S., 52-week period ending 12/29/2012 – UPC-coded purchases

bring grocery stores to underserved
“bring grocery stores to underserved”

More than 23 million Americans, including 6.5 million children, live in low-income urban and rural neighborhoods that are more than one mile from the nearest supermarket.

The White HouseFeb 9, 2010

Source: USDA & http://www.letsmove.gov/promote-affordable-accessible-food

small formats attract smaller households
Small formats attract smaller households

Distribution of Dollars – Household Size

Source: Nielsen Homescan, Total U.S., 52-week period ending 12/29/2012 – UPC-coded purchases

opportunities to reach young old males
Opportunities to reach young, old & males

Distribution of Dollars – Age of Female HH

Source: Nielsen Homescan, Total U.S., 52-week period ending 12/29/2012 – UPC-coded purchases

big box attraction to kid households
Big Box attraction to kid households

Distribution of Dollars – Kids in Household

Source: Nielsen Homescan, Total U.S., 52-week period ending 12/29/2012 – UPC-coded purchases

connect with multicultural via channels
Connect with multicultural via channels

Distribution of Dollars – Race

Source: Nielsen Homescan, Total U.S., 52-week period ending 12/29/2012 – UPC-coded purchases

hispanic attraction to club mass drug
Hispanic attraction to club, mass & drug

Distribution of Basket Ring Dollars – U.S. Hispanic Households

Source: Nielsen Homescan, U.S. National Hispanic Sample; 52-week period ending 12/29/2012

females drive trips but males gaining
Females drive trips, but males gaining

Share of Retail Channel Shopping Trips

2004

2012

Source: Nielsen Homescan, Total U.S.

females make larger planned trips
Females make larger “planned” trips

Average $ Basket Ring

2004

2012

Source: Nielsen Homescan, Total U.S.

weekend shopping frenzy
Weekend shopping frenzy

All-Outlet Share of trips by day of week by Females

Source: Nielsen Homescan, Total U.S., 52-weeks ending 12/29/2012

similar day of week shopping patterns
Similar day-of-week shopping patterns

All-Outlet Share of trips by day of week

Source: Nielsen Homescan, Total U.S., 52-weeks ending 12/29/2012

younger females shop weekends
Younger females shop weekends

All-Outlet Share of trips by day of week by Females

Source: Nielsen Homescan, Total U.S., 52-weeks ending 12/29/2012

catch males on the weekends
Catch males on the weekends

All-Outlet Share of trips by day of week by Males

Source: Nielsen Homescan, Total U.S., 52-weeks ending 12/29/2012

multi channel buying varies by category
Multi-channel buying varies by category

% of Buyers

Source: Nielsen Homescan, 52-weeks ending 12/29/2012; Total U.S. grocery, drug, club, dollar stores, mass-supercenters and mass-merch only; UPC-coded purchases

multi channel buyers drive category sales
Multi-channel buyers drive category sales

% of Dollars

Source: Nielsen Homescan, 52-weeks ending 12/29/2012; Total U.S. grocery, drug, club, dollar stores, mass-supercenters and mass-merch only; UPC-coded purchases

multi channel buyers are top spenders
Multi-channel buyers are top spenders

Annual Buying Rate

Source: Nielsen Homescan, 52-weeks ending 12/29/2012; Total U.S. grocery, drug, club, dollar stores, mass-supercenters and mass-merch only; UPC-coded purchases

continuity marketing via credit cards
Continuity marketing via credit cards

15.5% of Target’s total sales in the fourth quarter were REDcard transactions

Exclusive savings for Meijer card holders:

Sources: Target & Meijer

brands promoting blurring
Brands promoting blurring

Source: P&G Everyday email newsletter (01/11/2013) & The Home Depot

shifts in shopping industry innovation
Shifts in shopping & industry innovation
  • Club & dollar winning
  • High-end & discretionary retailers winning
  • Excellence in execution within channels
  • Accelerated industry innovation & collaboration
    • New formats
    • Store expansion
    • Strong food focus in many channels
    • Value messaging & promotions
    • Online 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
come see what s next at consumer 360
Come See What’s Next at Consumer 360

Join us on June 3 – 5, 2013 in Phoenix, AZ

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