Retail Market Review The Perfect Storm Edward Garner - Communications Director

Aldi Lidl Everyone else Waitrose M&S Coping with the Perfect Storm Edward Garner - Communications Director

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

Global Food Price Indices 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Food Price Index, UN FAO Food Price Index Cereals Price Index

Grocery Market Growth v. Inflation 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% 20/Sep/09 15/Nov/09 10/Jan/10 07/Mar/10 02/May/10 27/Jun/10 22/Aug/10 17/Oct/10 12/Dec/10 06/Feb/11 03/Apr/11 29/May/11 24/Jul/11 18/Sep/11 13/Nov/11 08/Jan/12 04/Mar/12 29/Apr/12 24/Jun/12 19/Aug/12 14/Oct/12 09/Dec/12 03/Feb/13 31/Mar/13 26/May/13 21/Jul/13 15/Sep/13 10/Nov/13 05/Jan/14 02/Mar/14 27/Apr/14 22/Jun/14 17/Aug/14 12/Oct/14 07/Dec/14 01/Feb/15 29/Mar/15 24/May/15 19/Jul/15 13/Sep/15 08/Nov/15 03/Jan/16 28/Feb/16 24/Apr/16 19/Jun/16 14/Aug/16 12 we growth (Grocers RST) 12 we inflation

Food and Drink as a Proportion of UK Household Expenditure % 25 20 15 10 5 0 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ONS Series ABQI / ABZV

Food and Drink as a Proportion of UK Household Expenditure % 25 Housing & Utilities 20 15 10 5 0 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ONS Series ABQI / ABZV

Total Grocery Budget Own Label Trends - 4-weekly m Latest 12-wk % Change 140 120 100 80 60 40 20 0 27-May-12 24-Jun-12 22-Jul-12 19-Aug-12 16-Sep-12 14-Oct-12 11-Nov-12 09-Dec-12 06-Jan-13 03-Feb-13 03-Mar-13 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 Tesco Asda Sainsbury's Morrisons +26% -29% -21% -11%

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

Annual Till Roll Totals Expenditure Trends Lidl 16 Aldi 13 Co-op 2 Waitrose 1 Total Grocers Sainsbury's Iceland 0 0 0 Tesco -1 Morrisons -2 Independents -3 Asda -4 52 w/e Aug 14 2016 y/y % Change

Long-Term Share of Till Roll Grocers 6 5 4 3 2 1 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Share (Expenditure)

Long-Term Share of Till Roll Grocers 34 32 30 28 26 24 Share (Expenditure) 22 20 18 16 14 12 10 8 6 4 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tesco Asda Sainsbury's Morrisons Total Aldi + Lidl

Latest Period Till Roll Totals - Share of Total Grocers Tesco 30.9 28.1 Sainsbury's Asda 16.4 17.5 16.1 15.7 Morrisons 11.5 10.6 Co-op 6.8 6.6 Aldi 3.0 6.2 Waitrose Lidl Iceland +5.4% + 6.9bn 4.6 2.8 2.0 5.1 4.5 2.1 Independents 2.2 2.0 Farmfoods 0.6 0.6 12 w/e 19 Aug 12 12 w/e 14 Aug 16

Latest Period Till Roll Totals - Share of Total Grocers Tesco 30.9 28.1 Sainsbury's Asda 16.4 17.5 16.1 15.7 Morrisons 11.5 10.6 Co-op 6.8 6.6 Aldi Waitrose Lidl Iceland Independents Farmfoods 3.0 4.6 2.8 2.0 2.2 0.6 6.2 5.1 4.5 2.1 2.0 0.6 12 w/e 19 Aug 12 12 w/e 14 Aug 16

Till-Roll Trends - Annual % Change - Rolling 52wk periods 6 5 4 3 2 1 0-1 -2-3 -4-5 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 Sainsbury's Tesco Asda Morrisons

Annual Till Roll Totals Expenditure Changes m Aldi 759 Lidl 668 Co-op 155 Waitrose 83 Sainsbury's 29 52 w/e Aug 14 2016 y/y m Change

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

Rushden, Northants - November 2015

SOCIAL CLASS PROFILES - 12 W/E JUL 17 2016 - % 5 9 9 10 7 11 9 10 11 17 12 10 12 14 14 15 15 15 15 18 17 15 19 22 28 23 25 25 25 22 25 31 28 26 26 25 25 26 24 25 46 28 21 18 16 22 23 19 24 27 19 20 20 Class E Class D Class C2 Class C1 Class AB 34 32 28 26 26 26 22 22 20 19 13 12 Waitrose M & S Sainsbury's Tesco Total Grocers Aldi Lidl Morrisons Co-op Asda Independents Iceland Farmfoods

Trended Aldi Loyalty Breakdown Sales % Shoppers % 49.6 44.1 40.7 36.1 33.5 87.2 84.5 81.7 78.8 76.5 36.5 37.6 37.9 39.2 38.9 13.9 19-Aug- 12 18.3 21.4 24.7 27.6 10.3 11.9 13.5 15.3 16.1 2.5 3.7 4.7 5.9 7.5 18-Aug- 17-Aug- 16-Aug- 14-Aug- 19-Aug- 18-Aug- 17-Aug- 16-Aug- 14-Aug- 13 14 15 16 52 w/e periods12 13 14 15 16 High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%)

Trended Tesco Loyalty Breakdown Sales % Shoppers % 9.3 9.2 9.7 10.1 10.4 24.8 25.1 25.9 25.5 25.1 43.7 44.1 45.5 46.7 47.5 25.3 25.1 25.1 24.5 24.2 65.8 65.7 64.5 64.4 64.5 31.0 30.9 29.4 28.8 28.3 19-Aug- 12 18-Aug- 13 17-Aug- 14 16-Aug- 15 14-Aug- 19-Aug- 16 52 w/e periods 12 18-Aug- 13 17-Aug- 14 16-Aug- 15 14-Aug- 16 High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%)

Trading Indices - Aldi 52 w/e Aug 14 2016 Frozen Poultry+Game 186 Fruit+Veg+Salads 147 Frozen Fish 140 Fresh Meat 132 Fresh Poultry+Game 132 Packet Breakfast 111 Biscuits 107 Ambient Bakery Products 106 Canned Goods 105 Sweet Home Cooking 102 Dairy Products 100 Frozen Confectionery 100

Trading Indices - Lidl 52 w/e Aug 14 2016 Frozen Poultry+Game 166 Fresh Meat 153 Fresh Fish 150 Fruit+Veg+Salads 147 Fresh Poultry+Game 145 Sweet Home Cooking 127 Frozen Confectionery 123 Frozen Fish 117 Canned Goods 112 Packet Breakfast 108 Biscuits 106 Pickle+Tbl Sce+Condiment 104

Year-on-Year Expenditure Trends - % change Aldi Fresh+Chilled 19.8 TOTAL GROCERIES 14.8 Toiletries 14.7 Household 14.5 Ambient Groceries 11.5 Frozen 9.6 Alcohol 6.3 52 w/e 14 Aug 16

Year-on-Year Expenditure Trends - & change Lidl Fresh+Chilled 20.5 TOTAL GROCERIES 15.6 Frozen 13.6 Household 13.6 Toiletries 13.3 Ambient Groceries 12.2 Alcohol 5.2 52 w/e 14 Aug 16

120 Fresh & Chilled Trading Indices 115 110 105 105.8 104.4 103.5 100 103.9 102.4 100.9 95 52 w/e 17 Aug 14 52 w/e 16 Aug 15 52 w/e 14 Aug 16

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

40 38 36 34 32 30 28 26 24 22 20 18 16 14 Aldi share amongst Asda/Aldi Shoppers - %

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

ON PROMOTION - % 50 45 40 35 30 25 20 15 10 5 0 Big 4

> The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback Frozen Insights

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Tesco - 12 w/e 8% 6% Contribution to growth %pts 4% 2% 0% -2% -4% -6% -8% -10% Full price Price reduction Multibuy Y for X Market growth Grocery (RST) 12w/e

Tesco Share Change - 12 week share year-on-year change 0.0-0.2-0.4-0.6-0.8-1.0-1.2-1.4-1.6 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16

Grocery Share at Round Pound Prices - % - Asda 22 20 18 16 14 12 10 8 1 2 3 4 6 4 2 0 11-Dec-11 08-Jan-12 05-Feb-12 04-Mar-12 01-Apr-12 29-Apr-12 27-May-12 24-Jun-12 22-Jul-12 19-Aug-12 16-Sep-12 14-Oct-12 11-Nov-12 09-Dec-12 06-Jan-13 03-Feb-13 03-Mar-13 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Asda - 12 w/e 6% 4% Contribution to growth %pts 2% 0% -2% -4% -6%? -8% -10% Full price Price reduction Multibuy Y for X Market growth Grocery (RST) 12w/e

Asda Year-on-Year Trends - Till Roll % 6 4 2 0-2 -4-6 -8 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 12 w/e Periods

Reasons for Store Choice - It always has low prices Asda 159 Co-operative 98 Morrisons 79 Tesco 76 Sainsbury's 66 M & S 60 Waitrose 29 LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015

Reasons for Store Choice - It always has low prices Aldi 222 Asda 159 Lidl 146 Co-operative 98 Morrisons 79 Tesco 76 Sainsbury's 66 M & S 60 Waitrose 29 LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015

We've ended Brand Match to bring lower regular prices Brand Match ended on 26 April 2016

PROMOTIONAL MECHANICS CONTRIBUTION TO GROWTH Sainsbury's - 12 w/e 15% Contribution to growth %pts 10% 5% 0% -5% -10% -15% -20% Full price Price reduction Multibuy Y for X Market growth

Sainsbury Share Change - 12 week share year-on-year change 0.6 0.4 0.2 0.0-0.2-0.4-0.6-0.8 03-Mar-13 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16

Frosty morning? Don t worry, we ve found a use for that Morrisons card

The Agenda Market Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response > The Fightback Frozen Insights

40 Aldi Year-on-Year Trends - Till Roll % 35 30 25 20 15 10 5 0 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 12 w/e Periods

Lidl Year-on-Year Trends - Till Roll % 30 25 20 15 10 5 0 31-Mar-13 28-Apr-13 26-May-13 23-Jun-13 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 12 w/e Periods

Long-Term Share of Till Roll Grocers 6 5 4 3 2 1 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Share (Expenditure)

Reasons for Store Choice - Waitrose It has friendly staff 285 I like the cafe / restaurant 255 I like the own-label goods less queuing than other stores 185 185 It has a good product range 158 It has a butcher's counter It has a delicatessen It has a fresh fish counter 137 132 129 It has an in-store bakery It's near to my home I like the store's layout 95 93 89 It sells clothing CDs etc. It has good value for money 65 63 It always has low prices 29 LinkQ Questionnaire - Outlet Share Index 52 w/e Mar 29 2015

M&S Share of Fresh & Chilled Groceries 12 11 10 9 8 7 6 5 4 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 Share (Expenditure)

M&S Year-on-Year Growth Trends - RST % 8 7 6 5 4 3 2 1 0 21-Jul-13 18-Aug-13 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 12 w/e Periods

RST Trends - Annual % Change - Rolling 52wk periods 7 6 5 4 3 2 1 0-1 -2-3 -4-5 15-Sep-13 13-Oct-13 10-Nov-13 08-Dec-13 05-Jan-14 02-Feb-14 02-Mar-14 30-Mar-14 27-Apr-14 25-May-14 22-Jun-14 20-Jul-14 17-Aug-14 14-Sep-14 12-Oct-14 09-Nov-14 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 Sainsbury's Tesco Asda Morrisons M&S Fresh & Chilled

FOR TONIGHT SHOPPER MISSIONS % WITHIN OUTLET For Tonight - Share of Occasions % 52 w/e 02 Feb 14 52 w/e 01 Feb 15 52 w/e 31 Jan 16 All Outlets 15 14 14 M & S 42 42 41 Sainsbury's Local 21 20 21 Budgens 20 18 16 The Co-operative 20 19 19 Tesco Express 19 16 18 Tesco Metro 18 17 18 Independents 17 18 17 Asda 11 11 11 Aldi 9 10 10

Trended Loyalty Breakdown Waitrose % M&S % 20.4 19.2 20.3 21.1 20.5 42.6 42.1 40.3 39.6 38.2 25.3 25.4 26.1 27.8 29.1 40.1 40.9 41.1 40.1 41.9 54.3 55.5 53.6 51.2 50.4 17.3 17.1 18.6 20.2 19.8 19-Aug- 12 18-Aug- 13 17-Aug- 14 16-Aug- 15 14-Aug- 19-Aug- 16 52 w/e periods 12 18-Aug- 13 17-Aug- 14 16-Aug- 15 14-Aug- 16 High Loyal (>50%) Medium Loyal (>20%) Low Loyal (>0%)

Total Groceries - Net Switching Volumes - M & S Tesco 32 Asda 24 Sainsbury's 22 Co-op 20 Morrisons 17 Independents 4 Waitrose 3 All Others 2 Farmfoods M & S - 0 Iceland Ocado -3-3 Aldi -4 Lidl -7 Switching - m 52 w/e Jul 19 2015 vs. 52 w/e Jul 17 2016

Total Groceries - Total Net Switching Volumes - Summary Aldi Lidl Ocado M & S Waitrose Farmfoods Iceland All Others Sainsbury's Co-op Independents Morrisons Tesco Asda -515-481 -1-17 -32-36 -46-56 -93 71 127 107 430 542 Switching - Spend ( m) 52 w/e Jul 19 2015 vs. 52 w/e Jul 17 2016

Total Internet Grocery - Rolling 12 w/e growth 22 22 19 17 17 16 16 14 16 15 16 15 14 12 10 8 8 9 10 9 9 7 7 6 6 6 14- Sep- 14 12- Oct- 14 09- Nov- 14 07- Dec- 14 04- Jan- 15 01- Feb- 15 01- Mar- 15 29- Mar- 15 26- Apr- 15 24- May- 15 21- Jun- 15 19- Jul- 15 16- Aug- 15 13- Sep- 15 11- Oct- 15 08- Nov- 15 06- Dec- 15 03- Jan- 16 31- Jan- 16 28- Feb- 16 27- Mar- 16 24- Apr- 16 22- May- 16 19- Jun- 16 17- Jul- 16 14- Aug- 16

14 Total Grocery Internet Lifestage Signatures 12 10 8 6 4 2 0 Pre-Family Young Family 0-4 Years Middle Family 5-9 Years Family 10+ Years Older Dependents Empty Nesters Retired 52 w/e Jul 17 2016

In-store theatre

Picture comparing a typical Aldi store entrance in Australia with its new look store in McGraths Hills in NSW

0 10 20 30 40 50 60 70 80 90 100 18-Dec-05 12-Feb-06 09-Apr-06 04-Jun-06 30-Jul-06 24-Sep-06 19-Nov-06 14-Jan-07 11-Mar-07 06-May-07 01-Jul-07 26-Aug-07 21-Oct-07 16-Dec-07 10-Feb-08 06-Apr-08 01-Jun-08 27-Jul-08 21-Sep-08 16-Nov-08 11-Jan-09 08-Mar-09 03-May-09 28-Jun-09 23-Aug-09 18-Oct-09 13-Dec-09 07-Feb-10 04-Apr-10 30-May-10 25-Jul-10 19-Sep-10 14-Nov-10 09-Jan-11 06-Mar-11 01-May-11 26-Jun-11 21-Aug-11 16-Oct-11 11-Dec-11 05-Feb-12 01-Apr-12 27-May-12 22-Jul-12 16-Sep-12 11-Nov-12 06-Jan-13 03-Mar-13 28-Apr-13 23-Jun-13 18-Aug-13 13-Oct-13 08-Dec-13 02-Feb-14 30-Mar-14 25-May-14 20-Jul-14 14-Sep-14 09-Nov-14 04-Jan-15 01-Mar-15 26-Apr-15 21-Jun-15 16-Aug-15 11-Oct-15 06-Dec-15 31-Jan-16 Fairtrade Prepacked Bananas Market Share Total Grocers Sainsbury

Fairtrade Shares Sainsbury's 30 Co-op Tesco 19 19 Waitrose 10 Asda 8 Morrisons 7 M & S 5 Aldi 2 Iceland Independents Lidl Farm Foods 1 1 1 0 Share of Fairtrade - 52 w/e Jul 17 2016

30 40 50 60 70 80 90 100 11-Mar-07 06-May-07 01-Jul-07 26-Aug-07 21-Oct-07 16-Dec-07 10-Feb-08 06-Apr-08 01-Jun-08 27-Jul-08 21-Sep-08 16-Nov-08 11-Jan-09 08-Mar-09 03-May-09 28-Jun-09 23-Aug-09 18-Oct-09 13-Dec-09 07-Feb-10 04-Apr-10 30-May-10 25-Jul-10 19-Sep-10 14-Nov-10 09-Jan-11 06-Mar-11 01-May-11 26-Jun-11 21-Aug-11 16-Oct-11 11-Dec-11 05-Feb-12 01-Apr-12 27-May-12 22-Jul-12 16-Sep-12 11-Nov-12 06-Jan-13 03-Mar-13 28-Apr-13 23-Jun-13 18-Aug-13 13-Oct-13 08-Dec-13 02-Feb-14 30-Mar-14 25-May-14 20-Jul-14 14-Sep-14 09-Nov-14 04-Jan-15 01-Mar-15 26-Apr-15 21-Jun-15 16-Aug-15 11-Oct-15 06-Dec-15 31-Jan-16 Not-Caged Eggs Market Share Sainsbury s Asda Tesco Morrisons

Total Organic Grocery Products including Baby - 4 weekly m 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Organic Market (inc. Baby) Rolling 52 week periods Y-on-Y Change % 11 11 12 12 12 11 10 9 8 7 7 6 6 6 5 5 5 6 7 7 8 4 3 2 2 2 1 1 1 2 2 3 4

Where Lidl shoppers prefer to shop < In other grocers In Lidl > 52 w/e Jul 17 2016

Where Aldi shoppers prefer to shop < In other grocers In Aldi > 52 w/e Jul 17 2016

400 Tesco - Net New/Lost & Repeat Buyers - Contribution to Change 300 Actual Contribution (000,000s) 200 100 0-100 -200-300 -400 14 Oct 12 11 Nov 12 09 Dec 12 06 Jan 13 03 Feb 13 03 Mar 13 31 Mar 13 28 Apr 13 26 May 13 23 Jun 13 21 Jul 13 18 Aug 13 15 Sep 13 13 Oct 13 10 Nov 13 08 Dec 13 05 Jan 14 02 Feb 14 02 Mar 14 30 Mar 14 27 Apr 14 25 May 14 22 Jun 14 20 Jul 14 17 Aug 14 14 Sep 14 12 Oct 14 09 Nov 14 07 Dec 14 04 Jan 15 01 Feb 15 01 Mar 15 29 Mar 15 26 Apr 15 24 May 15 21 Jun 15 19 Jul 15 16 Aug 15 13 Sep 15 11 Oct 15 08 Nov 15 06 Dec 15 03 Jan 16 31 Jan 16 28 Feb 16 27 Mar 16 24 Apr 16 22 May 16 19 Jun 16 17 Jul 16 Net New/Lost Repeat Total

250 200 Asda - Net New/Lost & Repeat Buyers - Contribution to Change Actual Contribution (000,000s) 150 100 50 0-50 -100-150 -200-250 -300 14 Oct 12 11 Nov 12 09 Dec 12 06 Jan 13 03 Feb 13 03 Mar 13 31 Mar 13 28 Apr 13 26 May 13 23 Jun 13 21 Jul 13 18 Aug 13 15 Sep 13 13 Oct 13 10 Nov 13 08 Dec 13 05 Jan 14 02 Feb 14 02 Mar 14 30 Mar 14 27 Apr 14 25 May 14 22 Jun 14 20 Jul 14 17 Aug 14 14 Sep 14 12 Oct 14 09 Nov 14 07 Dec 14 04 Jan 15 01 Feb 15 01 Mar 15 29 Mar 15 26 Apr 15 24 May 15 21 Jun 15 19 Jul 15 16 Aug 15 13 Sep 15 11 Oct 15 08 Nov 15 06 Dec 15 03 Jan 16 31 Jan 16 28 Feb 16 27 Mar 16 24 Apr 16 22 May 16 19 Jun 16 17 Jul 16 Net New/Lost Repeat Total

350 Aldi - Net New/Lost & Repeat Buyers - Contribution to Change 300 Actual Contribution (000,000s) 250 200 150 100 50 0 14 Oct 12 11 Nov 12 09 Dec 12 06 Jan 13 03 Feb 13 03 Mar 13 31 Mar 13 28 Apr 13 26 May 13 23 Jun 13 21 Jul 13 18 Aug 13 15 Sep 13 13 Oct 13 10 Nov 13 08 Dec 13 05 Jan 14 02 Feb 14 02 Mar 14 30 Mar 14 27 Apr 14 25 May 14 22 Jun 14 20 Jul 14 17 Aug 14 14 Sep 14 12 Oct 14 09 Nov 14 07 Dec 14 04 Jan 15 01 Feb 15 01 Mar 15 29 Mar 15 26 Apr 15 24 May 15 21 Jun 15 19 Jul 15 16 Aug 15 13 Sep 15 11 Oct 15 08 Nov 15 06 Dec 15 03 Jan 16 31 Jan 16 28 Feb 16 27 Mar 16 24 Apr 16 22 May 16 19 Jun 16 17 Jul 16 Net New/Lost Repeat Total

200 Lidl - Net New/Lost & Repeat Buyers - Contribution to Change Actual Contribution (000,000s) 180 160 140 120 100 80 60 40 20 0 14 Oct 12 11 Nov 12 09 Dec 12 06 Jan 13 03 Feb 13 03 Mar 13 31 Mar 13 28 Apr 13 26 May 13 23 Jun 13 21 Jul 13 18 Aug 13 15 Sep 13 13 Oct 13 10 Nov 13 08 Dec 13 05 Jan 14 02 Feb 14 02 Mar 14 30 Mar 14 27 Apr 14 25 May 14 22 Jun 14 20 Jul 14 17 Aug 14 14 Sep 14 12 Oct 14 09 Nov 14 07 Dec 14 04 Jan 15 01 Feb 15 01 Mar 15 29 Mar 15 26 Apr 15 24 May 15 21 Jun 15 19 Jul 15 16 Aug 15 13 Sep 15 11 Oct 15 08 Nov 15 06 Dec 15 03 Jan 16 31 Jan 16 28 Feb 16 27 Mar 16 24 Apr 16 22 May 16 19 Jun 16 17 Jul 16 Net New/Lost Repeat Total

% Aldi or Lidl shoppers also shopping in Mainstream in 4 w/e July 97.4 96.6 95.4 94.9 93.5 2012 2013 2014 2015 2016

The Agenda The UK Background Squeeze & Effect Towards the Mainstream? Invading the Repertoire EDLP and meaning it The Response The Fightback > Frozen Insights

Year-on-Year Expenditure Trends - % change All Outlets Healthcare 3.4 Fresh+Chilled 0.8 Alcohol 0.4 TOTAL GROCERIES -0.1 Frozen -0.8 Household -1.0 Ambient Groceries -1.2 Toiletries -1.7 52 w/e 14 Aug 16

Year-on-Year Expenditure Trends - % change Total Frozen Lidl 13.6 Aldi 9.6 Co-op 2.9 Farmfoods 1.6 Iceland 0.4 Total Grocers -0.9 Tesco -1.6 Sainsbury's -3.1 Waitrose -3.2 Morrisons -4.4 Asda -5.8 M & S Independents -16.1-6.7 52 w/e 14 Aug 16

Share of Total Grocers - Total Frozen Tesco 24.6 24.4 Iceland Asda Sainsbury's 16.3 14.4 12.4 13.7 12.1 16.5 Morrisons 9.1 8.8 Aldi Farm Foods Lidl The Co-operative Waitrose M & S Independents 5.3 4.2 3.5 3.8 3.4 1.1 0.7 5.9 4.3 4.1 3.9 3.3 1.0 0.6 52 w/e 16 Aug 15 52 w/e 14 Aug 16

Year-on-Year Expenditure Trends - % change Total Fresh & Chilled Lidl Aldi M & S Waitrose Co-op Total Grocers Farmfoods Sainsbury's Tesco Morrisons Iceland Asda Independents -1.2-1.7-3.5-3.9-5.0-5.3 0.7 0.2 3.0 4.2 5.8 20.5 19.8 52 w/e 14 Aug 16

Share of Total Grocers - Fresh+Chilled Tesco 28.2 27.6 Sainsbury's Asda Morrisons 17.3 15.4 12.1 11.6 17.0 14.5 Waitrose M & S Aldi The Co-operative Lidl 6.7 6.6 5.7 5.6 4.4 7.0 6.9 6.8 5.8 5.3 Iceland Independents Farm Foods 1.6 1.0 0.3 1.5 0.9 0.3 52 w/e 16 Aug 15 52 w/e 14 Aug 16

Trading Index Internet Delivery Organic 193 Frozen Household 120 118 Ambient Groceries Fresh+Chilled Toiletries 102 99 99 Alcohol 82 Healthcare 64 52 w/e Jul 17 2016

Trading Index Internet Delivery Take Home Soft Drinks Savoury Carbohydrts+Sncks Chilled Drinks Canned Goods Frozen Poultry+Game Packet Breakfast Savoury Home Cooking Frozen Prepared Foods Frozen Fish Household & Cleaning Prds Frozen Confectionery Pickle+Tbl Sce+Condiment Pet Care Sweet Home Cooking Fresh Poultry+Game Dairy Products Frozen Meat Haircare Take Home Savouries Biscuits Fruit+Veg+Salads Fresh Meat Hot Beverages Chilled Convenience Bathroom Toiletries Oral-Care Alcohol Fresh Fish Ambient Bakery Products Chilled Bakery Products Healthcare Take Home Confectionery 64 60 135 130 128 126 126 125 124 122 121 121 115 115 112 112 109 108 106 102 102 100 99 94 90 89 88 84 82 79 77 75 52 w/e Jul 17 2016

Trading Index Internet Delivery Fresh Poultry Fresh Sausages 114 110 Fresh Bacon Rashers 99 Fresh Bacon Joint Fresh Beef 94 93 Fresh Pork 85 Wet/Smoked Fish Fresh Lamb 80 79 52 w/e Jul 17 2016

Frozen Food - Internet Share by Household Income 14.6 16.4 9.7 10.6 10.9 6.2 6.9 7.5 0-9999 pa 10000-19999 pa 20000-29999 pa 30000-39999 pa 40000-49999 pa 50000-59999 pa 60000-69999 pa 70000 + 52 w/e Jul 17 2016

Frozen Food - Internet Share by Lifestage 15.1 12.9 10.2 10.0 7.0 7.0 3.5 Pre-Family Young Family 0-4 Years Middle Family 5-9 Years Family 10+ Years Older Dependents Empty Nesters Retired 52 w/e Jul 17 2016

Frozen Food Internet in Context 52 w/e 17 Aug 14 52 w/e 16 Aug 15 52 w/e 14 Aug 16 Total Frozen bn 5.7 5.7 5.7 y/y % Change -0.3-0.8 Internet Frozen m 391 454 475 y/y % Change 16.0 4.6 Internet Share % 6.8 7.9 8.4 Internet Penetration %HH 20 22 22 Grocer Tripsize 4.65 4.58 4.50 Internet Tripsize 7.25 7.05 6.79

Frozen Food Ranges - Y/Y Growth m - 52 w/e Jul 17 2016 Youngs Gastro Birds Eye Field Fresh Deluxe (Lidl) Quorn Albert Bartlett Iceland Butchers Market Iceland Classic Birds Eye Inspirations Chicago Town Linda Mccartney (Hain) Birds Eye Harry Ramsden Ben+Jerrys Artic Royal (Iceland) Goodfellas Takeaway Aldi Specially Selected 6.0 5.5 5.3 5.0 4.5 4.2 3.9 3.5 3.5 2.8 7.0 6.8 9.4 9.2 15.6

edward.garner@kantarworldpanel.com twitter edgarner