1 CopyrlghL Symphonyl8l Croup, 2012. ConfldenLlal and roprleLary.

Tim Eales
Director of Strategic Insight
Topline Report Q1 2012
Is economic uncertainty affecting FMCG sales?
2 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Key Findings
A unique crisis; lasting for more than two years and prices are rising
faster than earnings; Consumer Recession is here to stay.
Purchasing power is under pressure due to increasing prices which
are impacting volume sales in almost all countries and more significantly
in Non-Food. Spain being the exception.
High inflation is now impacting shoppers behaviour everywhere:
more price cautious for the cost of their grocery shopping basket, even in
Germany. Retailers strategy varies in different countries to retain
shoppers and maintain or increase its shopper basket: Every Day Low
Price, private labels, trade promotions.
The frugal shopper is smarter, buying less and more wisely -
leveraging from the multiple sources of information and the multi-channel
opportunities to control his grocery basket cost. Even BOGOF has
become of less interest, preferring coupons that have immediate impact
on the cost of the shopping basket.
Promotional activity is stabilised in most countries, with a little
decrease in UK (mainly on Food) but still very high there: 54% of volume
sales. Spain and France are seeing promotion activity reduced mainly on
the private label products.
Own labels are challenging national brands with share increasing
everywhere recently very slightly in France. The UK and Spain are
champions with 50% and 40% of value share.
HIGH PRICES
A PAUSE IN
PROMOTION
FRUGAL SHOPPER
3 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
1.7
-1.1 -1.1
-0.3
-0.1
-6.5
0.7
Germany France Netherlands Italy Spain UK Greece
GDP Growth Q1 2012 - % change vs. previous year
Source : Eurostat Q1 12 Checked 18
th
June 2012
Growth rates of GDP in volume
(based on non- seasonally adjusted data)
Euro area (17 countries) GDP up by 0.3%
4 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
EU (17) Unemployment rate up from 10.0% in July 11 to
11.0% in March 12
5.0
8.2
9.8
10.0
21.9
24.1
5.6
Netherlands Germany UK Italy France Greece Spain
Source : Eurostat March 12
(4.3) (5.9) (8.1) (8.3) (9.7) (17.8) (21.7)
5 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
2.7
3.8
3.4 3.4
-4.4
3.4
2.3
Netherlands Germany UK Italy France Greece Spain
FMCG Growth Q1 2012 - % change vs. previous year
-1.1
-0.6
0.6 0.6
-3.1
2.7
-2.2
VALUE TREND
VOLUME TREND
Italy and Spain, with the lowest price increases are showing growth
but also the earlier Easter is adding to growth in some countries.
Volume trends are mainly down despite Easter coming back
into Q1 whereas it was in Q2 in 2011
UNITS trend
for Greece
6 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
FMCG Consumer Reaction to Economic Uncertainty
FMCG price increases have reached the point that its impacting volumes in Food in some countries and significantly in
Non-Food for all countries - Shoppers make them lasting longer - except Spain .Rising prices have predominantly resulted in
increased value sales. On every day food items shopping basket, Greece has the highest price 24.76 euros vs. the lowest in
Germany, 13.52 euros.*
Price is the heart of the battle and different strategies are being developed to retain shoppers; in France a price war
between retailers have started; in the Netherlands and the UK there are tentative to develop Every Day Low Price (EDLP)
products, in all countries except France - private labels are gaining more market share with in Greece promotion initiatives.
In the UK promotion activity is still very high and in most countries its increasing for the Non-Food to sustain or limit the loss
in volume sales.
Promotion is changing less stocking for more expense control. Is the end of BOGOF? There is an increasing interest
for off-shelf activities: coupons, more and more popular in the Netherlands and Germany, and display fixtures. Frugal
shoppers are searching immediate solution to control or reduce the cost of their shopping basket. In France on-shelf offers
went down by 11% as off-shelf promotions grew by 1.9%.
In Spain consumption has increased as the Spanish are driven partly by the private labels. The high price gap with national
brands is a challenge for manufacturers who cant compete with trade promotion without risking to jeopardise their margins.
In Greece, its the promotion war: manufacturers are using tailor made activities and retailers are increasing private labels
promotion, with the development of hard discounter network.
Although Germany has the healthiest economy, the retail landscape is evolving with the insolvency of the large drug store
chain, Schlecker. How other retailers will attract the Schlekers shoppers?
Shoppers are cautious about the cost of their shopping basket and are willing to buy value for money, this can be the
private label offering against which national brands respond with strong trade promotion activity, and in some countries the
emergence of EDLP. Own Label sales have increased and promotion even if on a pause for some countries, its still part of
the landscape.
Consumer Recession: return to a few basic principles that have been forgotten during a time of rapid expansion and
waste: people are buying what they need when they need it, buying less each time they shop and buying more often: not
wasting so much. Turning down the heating and turning off more lights. Eating out and having their hair done a bit less, baking
at home and preparing more meals from scratch.
* Source: Every Day Food Items Shopping Basket for Just-Food.com by SymphonyIRI, for Q1 2012.
7 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
2.0
3.0
2.3
3.9
2.1
2.0
2.6
1.7
4.1
4.5
4.4
3.3
2.2
3.4
2.8
3.9
1.8
2.0
2.6
1.0
1.4
0.0 0.8
-0.2
-1
0
1
2
3
4
5
6
VALUE VOLUME PRICE
In France, Food volume sales have declined, with prices well up.
Non-Food volume is down again, the 3
rd
time in a year.
Trend of Food Sales in France
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
0.4
3.2
2.9
3.2
1.7
0.6
0.9
2.5
0.8
2.1
4.6
2.2
1.4 1.5 1.4
-1.0
0.9
-0.6 -0.7
-1.6
1.6
-0.3
-0.7
0.3
-2
-1
0
1
2
3
4
5
6
Trend of Non-Food Sales in France
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, Hypermarkets & Supermarkets
YoY Value & Volume price change
VALUE
GROWTH
FROM
INFLATION
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
8 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview - France
Inflation rate reached its highest level in February (+3.9% compared with
February 2011).
It should be decreasing in the next months (+2.6% in April). Moreover, a
price war is beginning between big retailers.
Because of this strong inflation and the economic situation too, FMCG
volume were only stable during the first quarter 2012.
We cannot easily detect an actual short term trend : good months are
following bad months (and vice versa). Weather conditions also keep
confusing the issue.
Private labels market share is slightly growing up but hard discounters
are ever under-performing.
Promotion activity is stable, around 18% of volume sales, which is the
same level as in 2009. Promotion activity has increased for national
brands when it has decreased for private labels. As we have seen in the
past, crisis are not impacting the promotion activity.
VAT on Food 5.5% & 19.6%
9 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
5.1
2.9
1.4
3.6
-3.0
0.9
2.3
-0.9
9.3
4.5
3.6
4.5
6.5
4.3
2.6
6.4 6.4
0.2
-3.5
-2.0
1.9 2.0 2.0 0.8
-4
-2
0
2
4
6
8
10
12
VALUE VOLUME PRICE
In Italy, Q1 2012 Food growth is compared with decline and late Easter a
year before. The decline in Non-Food volume has worsened.
Trend of Food Sales in Italy
(Packaged Food, Confectionery, Drinks, inc.. Alcohol)
3.3
4.5
1.8
1.1
-2.0
-3.3
-2.7
-1.7
0.0
0.6
0.0
-1.2
1.3
3.8
1.4
-1.9
-3.0
-2.4
-1.1
-0.5
-4.7
-0.6
-1.1
0.8
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
Trend of Non-Food Sales in Italy
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, All Outlets
YoY Value & Volume price change
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
10 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Inflation rate in FMCG Italy: In 2012 the inflation rate of FMCG continues at around
3% although lower than the peak in Oct 11. Consumers in this sector will be impacted.
% Price changes - FMCG
Tot. Italia Ipermercati + Supermercati + Superette
(3%)
(2%)
(1%)
0%
1%
2%
3%
4%
5%
6%
Differenza (Effetto Mix) Inflazione del Carrello Inflazione LCC
M
a
r
-
1
2
11 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview - Italy
The macro economic scenario in Italy shows a difficult situation for both consumption
and GDP trends in the first quarter of 2012, and the recovery phase seems to be a long
way off. During the first quarter the Italian GDP decreased by -0.8% vs. the previous
quarter (Source: Istat). The Italian GDP forecasts for 2012 indicates a -1.7% (Source:
OCSE). All gasoline prices registered an increase.
Unemployment is up to 9.8% in March 2012 (Source Eurostat). This is a really high rate
and affects mostly young people.
The purchasing power of households is under pressure. The families disposable income
rate was -1% in 2011 and it will probably reach a rate of -2.6% in 2012 (Source
Promoteia forecasts).
In March we registered a significant growth in Food sales due to the Easter festivity.
FMCG volume trend, if we exclude Easter sales, is -0.7%. This means the market is
suffering the difficult economic context.
For the last 11 months trading down has been seen in the FMCG shopping basket. This
has been caused by increased prices and the need to save money.
FMCG inflation is at 3.3% since around 6 months. It reached the general inflation rate
registered from ISTAT.
There has been a large increase in the number of own labels, resulting in share
improvement, during the last months particularly in the Non Food sector. Branded
products suffered worse than own labels in the difficult economic climate.
Trade promotions are relatively high at around 26.7%(Sales) with a growth of 1.6% vs.
previous year. Promotional pressure is at around 25.5%. During the last 4 months private
labels are promoting less than branded products.
VAT on Food 4% & 10%
12 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
-0.5
0.0
-0.9
0.3
-0.6
-0.5
0.0
1.3
2.9
2.0
6.0
4.0
3.1
4.8
3.2 3.2
1.7 1.7 2.2
2.6
5.2
2.9
2.4 1.8
-6
-4
-2
0
2
4
6
8
VALUE VOLUME PRICE
In Spain, food prices are barely changing and volume remains buoyant.
Non-Food price rises have reduced after going up in Q3.
Trend Spain Food Sales in Spain
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
-1.0
-0.1
0.4
1.4
0.6
2.0
0.8
2.4
1.7
4.0
3.9
1.8
3.8
4.4
5.2 5.2
2.6
3.9
2.8
4.0
2.3
2.5
4.3
1.9
-6
-3
0
3
6
Trend of Non-Food Sales in Spain
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, Hypermarkets & Supermarkets
YoY Value & Volume price change
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
13 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Sales Evolution FMCG Market vs. previous year: demand and price evolution
Spain - Prices stopped decreasing in March
3.8
1.2
3.2
1.9
2.7
2.0
5.2
1.7 1.5
2.2
3.3
2.7
4.7
4.3
3.9
3.0
3.9
3.3 3.3
2.1
2.4
1.5
1.8
0.7
3.6
1.5
1.0
1.4 1.4
0.2
2.1
1.2
1.4
4.6
-1.8
1.3
0.4
2.2
3.1
2.4
4.4
5.8
0.1
2.1
3.9
1.4
2.2
4.5
-3.6
-1.9
0.7
1.1
-0.6
-2.5
-3.5 -3.6
-4.5 -4.6
-4.1 -4.1
-4.4 -4.3 -4.5
-4.0
-3.2
-2.6
-2.2 -2.3 -2.1 -2.0 -2.1 -2.3
-2.1
-1.8
-1.3
-0.7 -0.7
0.0
0.2
1.0
1.3
1.1
1.2
1.3
1.2
0.8
0.7
0.8
1.7
1.2
0.8
0.8
A

o

2
0
0
7
A

o

2
0
0
8
A

o

2
0
0
9
A

o

2
0
1
0
A

o

2
0
1
1
A
c
u
m

A
b
r

'
1
2
P
0
1
-
0
9
P
0
2
-
0
9
P
0
3
-
0
9
P
0
4
-
0
9
P
0
5
-
0
9
P
0
6
-
0
9
P
0
7
-
0
9
P
0
8
-
0
9
P
0
9
-
0
9
P
1
0
-
0
9
P
1
1
-
0
9
P
1
2
-
0
9
P
0
1
-
1
0
P
0
2
-
1
0
P
0
3
-
1
0
P
0
4
-
1
0
P
0
5
-
1
0
P
0
6
-
1
0
P
0
7
-
1
0
P
0
8
-
1
0
P
0
9
-
1
0
P
1
0
-
1
0
P
1
1
-
1
0
P
1
2
-
1
0
P
0
1
-
1
1
P
0
2
-
1
1
P
0
3
-
1
1
P
0
4
-
1
1
P
0
5
-
1
1
P
0
6
-
1
1
P
0
7
-
1
1
P
0
8
-
1
1
P
0
9
-
1
1
P
1
0
-
1
1
P
1
1
-
1
1
P
1
2
-
1
1
P
0
1
-
1
2
P
0
2
-
1
2
P
0
3
-
1
2
P
0
4
-
1
2
Demanda Precio
14 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview - Spain
Unemployment continued to increase, rising to 24.4% in Q1 2012.
Annual inflation (CPI) for total 2011 was +3.2%. In Q1 2012 it was a +2.1%.
GDP has decreased -0.4% in Q1 2012, and for total 2011 it was +0.7%.
Sales of FMCG market in Q1 has increased +3.4%. This is due to the
increase of consumption, +2.3%, and also prices, +1.1%.
The increasing of FMCG sales is due in major measure to private label
increase, that in Q1 growth was 6.8%. Manufacturers are also increasing
their sales, but less: +1.1% in the same period.
Price gap between manufacturers and private label have been reduced, but
the difference is still significant: in 2010 it was 39%, and it has reduced to
38.4%.
Trade promotion levels are decreasing, in March 2012 it was 18.6%, -0.4
than March 2011.
15 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
2.2
3.6
1.7
0.1
-5.0
3.4
1.3
-0.5
1.8
2.4
-1.0
2.8 2.2
5.5
2.4 2.0
-2.0
-2.3
-0.5
1.0 0.4 1.5
-6
-4
-2
0
2
4
6
8
VALUE UNITS PRICE
In Greece, Food prices have continued to rise, Food units growth has
turned to decline in the last 6 months. Non-Food is well down.
Trend of Food Sales in Greece
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
-1.6
-1.9
2.6
-1.7
-9.4
0.7
-2.5
-1.7
-1.3
-7.2
-11.0
2.2
-8.5
-2.4
-4.8
-7.2
-1.5
0.3
-0.6 -0.3
0.2 0.0
-14
-12
-10
-8
-6
-4
-2
0
2
4 Trend of Non-Food sales in Greece
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, Hypermarkets & Supermarkets
YoY Value change
Price per unit
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 H1 2011 Q3 2011 Q4 2011 Q1 2012
16 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview - Greece
Inflation in Greece in April 2012 was +2.0%.
Unemployment rates for March 2012 reached 21.5%.
GDP for the first three months of 2012 was -6.2%.
Manufacturers nowadays, use tailor made activities in
order to promote their goods.
Retailers are promoting Own Label products more and
more.
Food category sales seem to suffer less, due to
consumption a transfer from other small stores (e.g.
kiosks, haberdasheries, convenience) to
supermarket/hypermarket stores.
Lidl continues its growth.
VAT on Food 23%
17 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
1.6
0.7
0.2
1.4
0.0
1.1
2.4
0.0
5.3
4.7
4.4
3.5
1.9 1.9
3.1
1.4
3.3
-1.0
0.1
-1.1
1.7
-0.1
1.5
-0.2
-3
-2
-1
0
1
2
3
4
5
6
VALUE VOLUME PRICE
In the Netherlands, the Food volume sales have started to decline as
prices increase. Non-Food volume has fallen since 2011.
Trend of Food Sales in the Netherlands
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
-2.1
2.2
0.9
-2.1
0.5
-1.8
-1.3
-0.2
0.5
-0.6
1.2
-0.9
-5.2
4.1
-2.8
-0.6
-1.6 -1.6
1.4
0.9
-1.6
-1.9
0.1 1.5
-6
-4
-2
0
2
4
Trend of Non-Food Sales in the Netherlands
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, All Outlets
YoY Value & Volume price change
VALUE
GROWTH
FROM
INFLATION
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
18 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview The Netherlands
Economic growth for 2011 was 1.2%. The first quarter of 2012, there
was a decline of 1.1% compared to Q1 2011. Three quarters in a row
theres a decline of GDP, so the Netherlands are still in recession.
Unemployment went up to 6.2% in the first quarter. Its quite low
compared to other European countries, but in The Netherlands, it was
never so high since 2005.
The mood among consumers has improved a bit but is still very
pessimistic. Consumers were less pessimistic about their own
financial situation. The confidence in the economic climate showed a
slight increase, especially for the next 12 months. Willingsness to buy
is still at a very low level.
Total Supermarket growth on the first quarter is 2,3%. Price increase
is the main driver, while volume sales is declining. Especially in food,
prices are higher than in 2010. Keep in mind that prices in Dutch
supermarkets are on the same level as in 2003!
Trade promoted volume is increasing. But keeping in mind that EDLP
fascias are gaining market share, promoted volume in hi-lo
supermarkets are increasing even more!
VAT on Food : 6%
19 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
-0.8
-2.0
-0.7
1.8
-1.2
2.4
2.3
0.0
6.8
3.6
3.3
2.7
7.1
-2.4
1.1
-1.2
2.2
0.2 0.5 0.2
-0.3
-2.4
-1.4
-1.6
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
VALUE VOLUME PRICE
In Germany, the effect of Food prices rising quickly has hit volumes
again in Q1 2012 impacting also Non-Food.
Trend of Food Sales in Germany
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
0.9
2.3
1.7
2.5
0.8
0.4
-0.9
1.3
1.7
2.1
0.7
1.7 0.7
-1.3
1.9
1.1
0.7
2.6
0.5 0.6
0.2 0.9
1.8
1.4
-2
-1
0
1
2
3
4
Trend of Non-Food Sales in Germany
(Pet Food, Health, Toiletry, Household)
SOURCE: SymphonyIRI, All Outlets inc. Aldi
YoY Value & Volume price change
VALUE
GROWTH
FROM
INFLATION
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
20 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
German shoppers tend to lead the trend of frugality in these critical times for the
European continent even though the economic situation in Germany is quite
stable and unemployment is as low as ever, increasing prices and uncertain point
of views for the future make shoppers reluctant to huge investments.
The positive development of value sales that we see for the first quarter 2012 in all
categories could reflect Easter holidays that shifted from the end of April in 2011 to
the beginning of the same month in 2012 - significant value growth in categories
beverages, sweets and chocolate.
While the unemployment rate in 2011 went down to a low figure of 7.1%, 2012 is
expected to be even more positive with the rate of unemployed people hitting a low
of 6.7%.
The German retail market will be confronted with severe changes in 2012 after drug
store chain Schlecker announced insolvency in Q1 2012, experts are curious to see
to which sales channels shoppers will switch to in the future large programs to
support employees of Schlecker have been implemented.
Although own labels remain at a high level, it seems that growth has reached a limit
in certain categories (e.g. household products, pet food).
Overview - Germany
VAT on Food 7% & 19%
21 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
5.1
3.3
2.5
1.8
1.5
1.9
4.0
0.8
3.2
4.7
4.8
4.2
1.0 1.1
1.7
0.2
-0.4
0.7
-1.4
0.5 0.1 0.0 0.0 1.0
-1
0
1
2
3
4
5
6
VALUE VOLUME PRICE
In the UK, price rises are causing volume decline again in Q1 2012 for
Non-Food and also on Food with value pushed up by inflation.
SOURCE: SymphonyIRI, All Outlets, YoY Value & Volume price change
Excludes Northern Ireland
Trend of Food Sales in the UK
(Packaged Food, Confectionery, Drinks, exc. Alcohol)
2.4
2.1
1.0
1.5
-0.1
1.0
3.5
1.4
1.6
2.0
2.2
2.6
1.1
1.6
0.9
-1.2
1.3
-1.1 -1.3
-1.6
-1.1 -1.1
-0.8
0.3
-3
-2
-1
1
2
3
4
5
6
Trend of Non-Food Sales in the UK
(Pet Food, Health, Toiletry, Household)
VALUE
GROWTH
FROM
INFLATION
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
22 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
3.3
3.4
3.8
4.5
4.2 4.2
4.6
5.5
5.3
9,200
9,400
9,600
9,800
10,000
10,200
10,400
10,600
Sep,
10
Oct,
10
Oct,
10
Nov,
10
Dec,
10
Jan,
11
Feb,
11
Mar,
11
Apr,
11
May,
11
Jun,
11
Jul, 11 Aug,
11
Sep,
11
Oct,
11
Oct,
11
Nov,
11
Dec,
11
Jan,
12
Feb,
12
Mar,
12
Apr,
12
0
1
2
3
4
5
6
7
8
TOTAL PRICE
Price increases continued with +5.3% in April. This is equivalent to an extra
527 across the whole basket of goods measured in just one year.
FMCG Shopping Basket GB All items
% CHANGE vs. LAST YEAR
* 4w/e 26th November
23 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Overview United Kingdom
Inflation (CPI) is still well above the Governments target but fell for the last 3 months, now
3.0% in April 2012.
Unemployment was slightly lower than the previous quarter at 8.2%. Temporary / part time
employment has increased within this total. This level is expected to increase further.
GDP fell in the 1st quarter of 2012 by -0.2% vs. Q4 2011. This is below the Governement
forecast. The forecasts for 2012 and beyond were reviewed downwards during 2011.
VAT was reduced in Dec 2008, returned in Jan 2010 and went up again in Jan 2011. This
affected prices through 2011, the anniversary in Jan 2012 showed a corresponding slight
reduction in the level of inflation.
Credit has started to reduce but the savings ratio has continued to fall.
Own Label (OL) value share is currently increasing very slightly in Food & Drink, unit share is
up a little more but so far the anticipated rise of OL hasnt really happened since brands are
promoting strongly.
Food prices started to rise before VAT went up in Jan 2011 have continued to go up
throughout the year. The current rate of increase is over 5%.
FMCG sales started to falter and volumes are down in 2011. Non-Food volumes have been
hit harder than Food volumes but Food is still down for Q112 by -0.4%.
Easter was earlier in 2012 and March was relatively good weather-wise. Q1 contains some of
the build up to Easter and so sales were better than they could have been. Despite this sales
were still down so the underlying trend could be worse than we are seeing here.
VAT on Food 0% & 20%
24 CopyrlghL Symphonyl8l Croup, 2012. ConfldenLlal and roprleLary.
Tim Eales
Director of Strategic Insight
Topline Report Q1 2012
Topline Trade Promotion Trends
25 Copyright SymphonyIRI Group, 2010. Confidential and Proprietary.
25 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
0
10
20
30
40
50
60
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Deal levels vary enormously across Europe - Food
GERMANY
NETHERLANDS
UK
ITALY
SPAIN
FRANCE
% SALES WITH TRADE PROMOTION (Volume SP, NL, UK Value IT, GE, FR)
Trade Promotion level is still very high but no higher in the latest
quarter than then previous year in the UK.
Increasing in Italy over the past year and lower in Spain.
26 Copyright SymphonyIRI Group, 2010. Confidential and Proprietary.
26 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
0
10
20
30
40
50
60
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Deal levels vary enormously across Europe Non-Food
GERMANY
NETHERLANDS
UK
ITALY
SPAIN
FRANCE
% SALES WITH TRADE PROMOTION (Volume SP, NL, UK Value IT, GE, FR)
Trade Promotion levels have remained high in the UK and
increasing in Q1 12 in Italy.
27 Copyright SymphonyIRI Group, 2010. Confidential and Proprietary.
27 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
0
10
20
30
40
50
60
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Deal levels vary enormously across Europe All Products
GERMANY
NETHERLANDS
UK
ITALY
SPAIN
FRANCE
% SALES WITH TRADE PROMOTION (Volume SP, NL, UK Value IT, GE, FR)
Increased levels of Trade Promotion in Italy and the Netherlands
with a slight drop in the UK in Q1 12.
28 Copyright SymphonyIRI Group, 2010. Confidential and Proprietary.
28 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Looking Forward
Recommendations
Build strong brand loyalty with a direct access to your
consumers. Retailers will see it as an opportunity for
them as well.
Be very straightforward on the promotion strategy
goals and get appropriate analytics solutions enabling
you to simulate price and promotion impact on your
margins, on your revenue, on the category and on
your competition to achieve your performance target.
Get a clear view of trip missions decision and
impacting factors for each shopper segment to gain
market share and avoid cannibalisation.
Stimulate need through media activity.
Suppliers must be aware of any shift to EDLP type
pricing and ensure that their portfolio pricing has
integrity in the face of such a move.
Manufacturers need to assess the category
competitive risk from own label growth and
development and adjust their portfolio and retail
approach.
Insights
Shoppers have access to multiple source of information
and influence via internet, on real time.
Although promotion activity is high, it will be difficult to
reverse the trend. Its correlated to price increase which
could continue at its present rate for some time to come.
Multi channel shoppers.
Shoppers buying more based on need than want.
Promotional pressure in food has been less intense with
declines in France and Spain, whereas the UK faces the
fiercest deal pressure. Promotional activity in Non-Food
has ramped up again in some countries in hope to re
energize volume sales.
Manufacturers are fighting hard to protect their share of
sales and promotions in the face of fierce own label
competition and some are re-engineering lines or launching
new variants.
29 Copyright SymphonyIRI Group, 2010. Confidential and Proprietary.
29 Copyright SymphonyIRI Group, 2012. Confidential and Proprietary.
Final Notes
Source: SymphonyIRI Group InfoScan, syndicated retail tracking service
Methodology: Seven quarters of review, YoY data for FMCG
Country coverage: France, Germany Greece, Italy, the Netherlands,
Spain, United Kingdom
To gain deeper insights, predictive analysis and
recommendations on specific products, categories,
segments, channels or retailers
contact your SymphonyIRI Consultant
or email to: eu.marketing@symphonyiri.com
Contact: SymphonyIRI Group, eu.marketing@SymphonyIRI.com, Tel: +33 1 30 06 23 62