NACDS 2013 Annual Meeting - Kantar Retail iQ
17.07.2013 • Views
Share Embed Flag

NACDS 2013 Annual Meeting - Kantar Retail iQ

NACDS 2013 Annual Meeting - Kantar Retail iQ

NACDS 2013 Annual Meeting - Kantar Retail iQ

SHOW MORE
SHOW LESS
ePAPER READ
DOWNLOAD ePAPER
kantarretailiq.com

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

START NOW

<strong>NACDS</strong> <strong>2013</strong> <strong>Annual</strong><br />

<strong>Meeting</strong><br />

© <strong>2013</strong> <strong>Kantar</strong> <strong>Retail</strong> Specific, Relevant, Actionable Insight / Worldclass Speakers /<br />

<strong>Kantar</strong> <strong>Retail</strong> / Thought Leadership Grounded In Fact

Copyright© <strong>2013</strong> <strong>Kantar</strong> <strong>Retail</strong><br />

All Rights Reserved.<br />

501 Boylston Street, Suite 6101, Boston, MA 02116<br />

(617) 912- 2828<br />

howard.zimmerman@kantarretail.com<br />

No part of this material may be reproduced or transmitted in any form or by any<br />

means, electronic or mechanical, including photography, recording, or any information<br />

storage and retrieval system now known or to be invented, without the express written<br />

permission of <strong>Kantar</strong> <strong>Retail</strong>.<br />

The printing of any copies for back up is also strictly prohibited.<br />

Disclaimers<br />

The analyses and conclusions presented in this seminar represent the opinions of <strong>Kantar</strong><br />

<strong>Retail</strong>. The views expressed do not necessarily reflect the views of the management<br />

of the retailer(s) under discussion.<br />

This seminar is not endorsed or otherwise supported by the management of any of the<br />

companies covered during the course of the workshop or within the following slides.

<strong>2013</strong> Participating <strong>Retail</strong>ers<br />

Ahold USA<br />

Alliance Boots<br />

The Bartell Drug Company<br />

BJ's Wholesale Club, Inc.<br />

CARE Pharmacies Cooperative, Inc.<br />

Chain Drug Consortium, LLC<br />

Costco Wholesale dba Costco Pharmacies<br />

CVS Caremark Corporation<br />

Dollar General Corp.<br />

drugstore.com<br />

Family Dollar Stores<br />

Farmacia Guadalajara S.A. de C.V.<br />

Farmatodo, C.A.<br />

Fruth Pharmacy<br />

Genoa Healthcare Holdings, LLC<br />

Good Neighbor Pharmacy<br />

H-E-B<br />

Hannaford Bros., Co.<br />

Health Mart<br />

Hi-School Pharmacy Services LLC<br />

Hy-Vee Inc.<br />

Implozia Pharmacy Network<br />

Kerr Drug, Inc.<br />

Kinney Drugs, Inc.<br />

Lewis Drugs, Inc.<br />

London Drugs Limited<br />

Medicine Shoppe International, Inc.<br />

Meijer, Inc.<br />

Navarro Discount Pharmacies<br />

99 Cents Only StoresOMNICARE, INC.<br />

Pharmaca Integrative Pharmacy<br />

Rexall Pharma Plus<br />

Rite Aid Corporation<br />

Roundy’s Supermarkets, Inc.<br />

Safeway Inc.<br />

Sam’s Club<br />

Sav-On Drugs<br />

Schnuck Markets, Inc.<br />

Sears Holdings Corporation<br />

7-Eleven, Inc.<br />

Shoppers Drug Mart Corporation<br />

SUPERVALU INC.<br />

Target<br />

Thriftway/Zitomer Drug<br />

Thrifty White Pharmacy<br />

Topco Associates LLC<br />

Ulta Beauty<br />

Wakefern Food Corp./ShopRite<br />

Wal-Mart Stores, Inc.<br />

Walgreen Co.<br />

Walgreens Boots Alliance Development GmbH<br />

Wegmans Food Markets, Inc.<br />

source: <strong>NACDS</strong>

<strong>Retail</strong> Trends<br />

Are you talking to your accounts about these? Do you have a strategy?<br />

<strong>Retail</strong>ers are investing in store refurbishment, relocation, and acquisitions: Store portfolios- formats to<br />

address multiple shoppers rather than one store answering all needs<br />

<strong>Retail</strong>ers are investing in multichannel: Apps, websites, QR codes, mobile<br />

Heightened focus on merchandising tactics: Creating and having relevant assortments; designing<br />

stores for shoppers rather than operations- enhanced use of elements like lighting, shelving, signage;<br />

segmentation of stores, shoppers<br />

Loyalty program developments to increase shopper engagement<br />

Health and Wellness plays an important role throughout the merchandising and store development<br />

process: Assortment implications, opportunities, multichannel opportunies<br />

Having a Successful Conference<br />

Saturday Must Attend Events<br />

• “Meet the <strong>Retail</strong>er” program<br />

• Strategic Exchange Appointments<br />

• Inaugural Attendees Orientation<br />

• Opening Celebration<br />

Sunday Must Attend Events<br />

• Business Program I<br />

• Strategic Exchange Appointments<br />

Monday Must Attend Events<br />

• <strong>NACDS</strong> Chain Members & PAC Breakfast<br />

(Chain members, PAC tickets holders,<br />

invited guests only)<br />

• Strategic Exchange Appointments<br />

• <strong>NACDS</strong> Luncheon (spouses/companions,<br />

a ticketed event)<br />

Tuesday Must Attend Events<br />

• Business Program II<br />

• Strategic Exchange Appointments<br />

• Board of Directors Reception & Dinner<br />

• Board of Directors Awards & Entertainment<br />

Attire<br />

Attire for all <strong>NACDS</strong> events is resort<br />

casual- except for the <strong>NACDS</strong> Luncheon, dinner,<br />

and entertainment. Attire for the <strong>NACDS</strong> luncheon<br />

on Monday is dressy daywear for ladies and<br />

business for men. Attire for the Board of Directors<br />

reception and dinner on Tuesday is cocktail<br />

for ladies and business for men.<br />

source: <strong>NACDS</strong>

Having a Successful Conference<br />

Start early soliciting appointments – as much as three months in advance<br />

Develop a convincing proposition for each company as to why they will benefit from a meeting with you<br />

Establish an individually specific agenda for each meeting<br />

Make sure you have done your homework on the retailer - Check out their website and learn as much as<br />

you can about them<br />

Develop a “one pager” summarizing the important points about your company, your key products, your<br />

point of difference, and any performance matrices that set you apart from the competition<br />

Consider dropping an advance thank you for a planned meeting to remind the person of the appointment or<br />

an after-meeting thank you to recap what was accomplished<br />

Take notes and follow-up after the meeting – this may be your most critical success factor<br />

source: <strong>NACDS</strong>

Participating Drug <strong>Retail</strong>ers

Alliance Boots<br />

Key Initiatives<br />

In Aug 2012: Walgreens acquired 45% stake in Alliance Boots. Merger has created the largest global<br />

pharmacy led H&B retailer as well as the largest pharmaceutical wholesaler<br />

Targeted procurement synergies amounting to $1 billion by 2016 (up from $100-150 million in 2012)<br />

Potential investments towards geo-expansion in continental Europe & emerging markets<br />

Best practice sharing from Walgreens around managing large scale supply chain and pharmacy cost<br />

optimization<br />

Expansion of its wholesale business through acquisitions in Europe and partnerships/joint ventures in<br />

Asia and Middle East<br />

Key Players<br />

Stefano Pessina- Executive Chairman<br />

Ornella Barra- Chief Executive, Pharmaceutical Wholesale Division<br />

Alex Gourlay- Chief Executive, Health & Beauty Division<br />

George Fairweather- Group Finance Director<br />

Gregory Wasson- President and Chief Executive Officer, Walgreens<br />

Robert Zimmerman- Senior Vice President & Chief Executive Officer, Walgreens<br />

Wade Miquelon- Executive Vice President & Chief Financial Officer, Walgreens<br />

Stengths<br />

Increased negotiating power (procurement<br />

savings) as a result of the merger<br />

No.1 H&B retailer in the UK aided by:<br />

Pharmacy-led business- high margin, footfalls<br />

Multi-format footprint<br />

Strong brand perception – private label<br />

Synergies driven through wholesale and<br />

business manufacturing divisions- vertical<br />

integration<br />

Loyalty card (Advantage card)<br />

Opportunities<br />

Availability of more funds that can be channelled<br />

towards international expansion<br />

Best practice sharing from Walgreens especially<br />

around managing supply chain, big format stores,<br />

and pharmacy cost optimisation<br />

Food business<br />

Services such as in-store surgeries<br />

Manufacturing exports to international retailers<br />

(such as Target, Carrefour, etc.)<br />

Weaknesses<br />

Perceived as a costlier (premium priced) brand as<br />

compared to Superdrug<br />

Over promotional–complicated/ complex<br />

Jaded marketing<br />

Store design – cramped<br />

Weak online business<br />

Threats<br />

Increasing competition from grocers within<br />

beauty space<br />

Declining average revenue per prescription (due<br />

to lower reimbursement prices on generic drugs)<br />

can erode growth & margin<br />

Loyalty card challenged by the launch of Super<br />

drug ,Tesco, H&B range<br />

Crowded UK market - Limited ability to expand<br />

core high margin pharmacy business due to<br />

legislative restrictions

Alliance Boots<br />

Sales & Store Forecasts<br />

Sales (current USD millions)<br />

Market Format Banner 2007 2012e 2017e<br />

Ireland Drug with prescriptions Alliance Boots 368.3 357.7 401.9<br />

Italy Drug with prescriptions Alliance Boots 40.0 44.0 48.4<br />

Netherlands Drug with prescriptions Alliance Boots 294.2 241.6 268.9<br />

Norway Drug with prescriptions Alliance Boots 590.5 646.2 683.5<br />

Russia Drug with prescriptions Alliance Boots 4.0 4.6 5.1<br />

Thailand Drug with prescriptions Alliance Boots 94.1 149.4 186.8<br />

UK Drug no prescriptions Boots 1,001.6 222.3 227.2<br />

UK Drug with prescriptions Boots 10,635.5 7,152.7 7,634.7<br />

UK Drug with prescriptions Your Local Boots Pharmacy 80.0 2,272.3 2,440.7<br />

UK Online <strong>Retail</strong> boots.com 232.1 415.4 653.1<br />

UK Other Category Specialist Boots Optician 367.1 514.3 625.9<br />

UK Other Category Specialist D&A - 18.5 -<br />

Store Forecasts<br />

Market Format Banner 2007 2012e 2017e<br />

Ireland Drug with prescriptions Alliance Boots 48 73 78<br />

Italy Drug with prescriptions Alliance Boots 21 20 20<br />

Netherlands Drug with prescriptions Alliance Boots 78 73 74<br />

Norway Drug with prescriptions Alliance Boots 148 156 164<br />

Russia Drug with prescriptions Alliance Boots 14 7 8<br />

Thailand Drug with prescriptions Alliance Boots 141 218 264<br />

UK Drug no prescriptions Boots 267 85 86<br />

UK Drug with prescriptions Boots 2301 1410 1431<br />

UK Drug with prescriptions Your Local Boots Pharmacy 50 990 1012<br />

UK Other Category Specialist Boots Optician 142 576 655<br />

UK Other Category Specialist D&A 50<br />

Merchandising & Marketing<br />

Analyzing card data<br />

drives loyalty and<br />

frequency through<br />

price promotions on<br />

products linked to<br />

individual shoppers<br />

In-store advantage<br />

card readers<br />

promote products<br />

with reward<br />

loyalty points

Bartell Drugs<br />

Key Initiatives<br />

New, customer-friendly website introduced<br />

Convenient in-store health care awareness programs and services<br />

State of the art in-store and online digital services<br />

Commitment to community<br />

Environmental leadership<br />

Key Players<br />

George D. Bartell - Chairman and CEO<br />

Jean Bartell Barber - Vice-Chairman and CFO<br />

<strong>Retail</strong>er At-A-Glance<br />

Date Founded: 1890<br />

Number of stores/Operating area: 58 stores located in Washington (King, Snohomish and Pierce counties)<br />

Ownership: Privately owned & operated by the Bartell family of Seattle. George D. Bartell, Chairman and<br />

CEO; Jean Bartell Barber, Vice-Chairman and CFO.<br />

Employees: 1,700 Employee Associates, all located in the Puget Sound region.<br />

Notable: The company has only had three presidents, all members of the Bartell family, spanning three<br />

centuries of operation.<br />

Website: Bartell Drugs introduced a completely redesigned website in January 2012. The easy-to-navigate<br />

site offers health & wellness resources, express prescription refills, digital photo orders, current sale and<br />

coupon offers, social media sharing and community involvement and store locator assistance.<br />

Sales & Store Forecasts<br />

Sales in USD,<br />

millions<br />

Merchandising & Marketing<br />

2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

TOTAL USA 368 423.02 473.48 2.83% 2.28%<br />

# of Stores 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

TOTAL Bartell<br />

Drugs USA 56 58 61 0.70% 1.01%

CVS<br />

Key Initiatives<br />

Differentiating Front Store: Personalization featuring ExtraCare; myCVS store clustering; differentiating<br />

private brands; converting existing customers<br />

Driving Pharmacy Growth Through: WeCARE workflow and patient care excellence including pharmacist<br />

interventions to drive adherence and optimizing value of generics<br />

Growing Store Base & Building Growth Culture: Expand footprint, stores own sales to shift accountability<br />

for sales to the stores<br />

Key Players<br />

Larry Merlo- President and CEO, CVS Caremark<br />

David M. Denton- Executive VP and CFO, CVS Caremark<br />

Mark Cosby- Executive VP, CVS Caremark, President, CVS/Pharmacy<br />

Per Lofberg- Executive VP, CVS Caremark, President, Caremark Pharmacy Services<br />

Troyen Brennan, MD, MPH- Executive VP and Chief Medical Officer<br />

Stengths<br />

ExtraCare loyalty card program<br />

Consumer-centric<br />

Open to new ideas and experimentation<br />

Format innovation<br />

Acquisition and integration are core capabilities<br />

Strong healthcare services portfolio: Caremark,<br />

MinuteClinic<br />

Online services and offerings<br />

Opportunities<br />

Increase use of loyalty card data<br />

Store clustering initiative<br />

Convenient health and beauty destination<br />

Leverage MinuteClinic<br />

Growth of Pharmacy Services Segment<br />

Increased market share gains from Express<br />

Scripts/Walgreens dispute<br />

Healthcare reform<br />

Acquisition of Drogaria Onofre<br />

Weaknesses<br />

Variance in store base<br />

Inconsistent execution<br />

Mindshare shift – Caremark<br />

Silo’d organization<br />

Less convenient real estate tha Walgreens<br />

High mix of sales from pharmacy<br />

Share losses at acquired<br />

Debt leverage<br />

Threats<br />

Direct competition with Walgreens<br />

Intensifying competitive pressure from alternative<br />

pharmacy formats (mass, grocery)<br />

Growth of small box formats.<br />

Changing the fill-in, top-up trip and further<br />

increase the need for differentiated destination<br />

branding<br />

Regulatory and economic conditions

CVS<br />

Sales & Store Forecasts<br />

<strong>Retail</strong> Sales (USD Billions) 2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

'12E - '17E<br />

CAGR<br />

CVS 44.92 63.1 81.59 7.03% 5.27%<br />

Longs - 0.49 0.58 - 3.43%<br />

Pharmacare 0.14 0.21 0.39 8.45% 13.18%<br />

TOTAL DRUGSTORE 45.07 63.8 82.55 7.20% 5.29%<br />

cvs.com 0.16 0.35 0.79 16.95% 17.68%<br />

TOTAL CVS USA 45.23 64.14 83.35 7.24% 5.38%<br />

Banner 2007 2012E 2017E<br />

'07 - '17E<br />

CAGR<br />

'07 - '17E<br />

CAGR<br />

CVS 6,245 7,435 8,122 3.5% 1.8%<br />

Longs - 50 55 - 1.9%<br />

Pharmacare 56 31 31 -11.2% 0.0%<br />

TOTAL US Stores 6,301 7,516 8,208 3.6% 1.8%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Top 25 <strong>Retail</strong>ers Shopped during Past Four Weeks by Monthly<br />

CVS/Pharmacy Shoppers<br />

Total 883<br />

CVS/Pharmacy 100% Staples 26%<br />

Amazon.com 58% Dollar General 26%<br />

Walmart Supercenter 53% Michaels 25%<br />

Target GM 41% Barnes & Noble 25%<br />

Kohl’s 40% eBay.com 25%<br />

The Home Depot 38% Netflix 23%<br />

Walgreens 38% Kmart/Big Kmart 23%<br />

Macy’s 35% Hallmark 23%<br />

Dollar Tree 34% Sears 22%<br />

Lowe’s 32% Costco 22%<br />

JCPenney 32% Trader Joe’s 22%<br />

Best Buy 32% Rite Aid 21%<br />

Bed Bath & Beyond 29% Old Navy 20%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape, Nov 2012

Kinney Drugs<br />

Corporate Info<br />

Kinney Drugs is a leading pharmacy across New York State and Vermont.<br />

Kinney Drugs Value Card loyalty savings program<br />

Kinney Cares prescription savings plan<br />

Kinney Drugs is a leading pharmacy across New York State and Vermont.<br />

Commitment to community<br />

Environmental leadership<br />

Key Players<br />

Owen W. Halloran, R.Ph.- SVP of Pharmacy<br />

Procurement<br />

Bridget-ann Hart, R.Ph.- President, Kinney<br />

Healthcare Services<br />

Wayne C. Jone- VP of MIS<br />

Stephen P. McCoy- EVP, C.F.O<br />

David C. McClure- VP of Real Estate<br />

Craig Painter- C.E.O and Chairman of the Board<br />

David Warner- President of ProAct<br />

Sales & Store Forecasts<br />

Sales in millions<br />

of US Dollar<br />

2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Kinney 653.23 821.82 1,011.58 4.7% 4.2%<br />

# of Stores 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Kinney 91 94 104 0.7% 2.0%<br />

Merchandising & Marketing<br />

Kinney Drugs Value Card loyalty savings program<br />

Kinney Cares prescription savings plan<br />

James Spencer- COO Kinney Drug Store Division<br />

Michael Duteau, R.Ph.- VP of Pharmacy<br />

Operations<br />

Jeffrey A. Rorick- VP Information Services, CIO<br />

John Dyer- General Manager Healthcare Services<br />

James R. Wuest- VP of Marketing<br />

Rich McNulty- VP of Human Resources<br />

Rick Cognetti, Jr.- VP of Marketing and<br />

Merchandising<br />

Lew Kimball- VP of Corporate Asset Protection

Pharmaca<br />

Key Initiatives<br />

Prescription Services<br />

Professional Staff<br />

Professional Grade Supplements- i.e., Metagenics and Pure Encapsulation<br />

Natural Beauty- i.e., high-quality brands available like Jurlique, Jane Iredale, Dr. Hauschka and many<br />

other Compact for Safe Cosmetics signers<br />

Over-the-Counter MedicationsSustainable Philosophy- We believe that personal health is connected to<br />

environmental health. We ensure our stores are environmentally friendly by buying wind power offsets,<br />

installing recycled carpet and offering organic and sustainably harvested products.<br />

Key Players<br />

Mark Panzer- President and Chief Executive Officer<br />

Michael Kruteck- Chief Financial Officer<br />

Laura Coblentz- Vice President of Marketing and Innovation<br />

Stu Gratz- Vice President of Pharmacy Operations<br />

David Janowicz- Vice President of Merchandising<br />

Don Summerfield- Vice President of Integrative Medicine<br />

Allison Janda- Vice President of <strong>Retail</strong> Store Operations<br />

Sales & Store Forecasts<br />

Sales in millions of US<br />

Dollar<br />

2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

'12E - '17E<br />

CAGR<br />

Pharmaca 72.08 104.59 132.62 7.7% 4.9%<br />

TOTAL USA 72.08 104.59 132.62 7.7% 4.9%<br />

# of Stores 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Pharmaca 22 24 28 1.8% 3.1%<br />

TOTAL USA 22 24 28 1.8% 3.1%<br />

Merchandising & Marketing

Rexall<br />

Key Initiatives<br />

Prescription Services<br />

Professional Staff<br />

Professional Grade Supplements- i.e., Metagenics and Pure Encapsulation<br />

Natural Beauty- i.e., high-quality brands available like Jurlique, Jane Iredale, Dr. Hauschka and many<br />

other Compact for Safe Cosmetics signers<br />

Over-the-Counter MedicationsSustainable Philosophy- We believe that personal health is connected to<br />

environmental health. We ensure our stores are environmentally friendly by buying wind power offsets,<br />

installing recycled carpet and offering organic and sustainably harvested products.<br />

Key Players<br />

Mark Panzer- President and Chief Executive Officer<br />

Michael Kruteck- Chief Financial Officer<br />

Laura Coblentz- Vice President of Marketing and Innovation<br />

Stu Gratz- Vice President of Pharmacy Operations<br />

David Janowicz- Vice President of Merchandising<br />

Don Summerfield- Vice President of Integrative Medicine<br />

Allison Janda- Vice President of <strong>Retail</strong> Store Operations<br />

Stengths<br />

Experience in the market<br />

Mail-order pharmacy<br />

Katz’s ProPharm<br />

Trusted, community-oriented provider<br />

Rexall private label<br />

Opportunities<br />

Expand private label<br />

Further expand health services, role of the<br />

pharmacist<br />

Real estate acquisitions – broaden domestic<br />

presence<br />

eCommerce<br />

Advance customer insights<br />

Serving aging Boomers<br />

Weaknesses<br />

Varied store conditions<br />

Over-indexing on elderly shoppers<br />

Over-reliance on the pharmacy first proposition<br />

Under-development of higher margin and trip<br />

driving categories (beauty, food)<br />

Lacking loyalty card, underdeveloped customer<br />

data program<br />

Threats<br />

Regulation – margin pressure<br />

Increased competition from outside of channel<br />

(e.g., Walmart, Loblaw, Target)<br />

Loss of relevance with younger shoppers

Rexall<br />

Sales & Store Forecasts<br />

Sales (CND)<br />

Continent\Country <strong>Retail</strong>er Banner<br />

Sales (CND Billions) CAGR<br />

2007 2012E 2017E<br />

(2007 -<br />

2012E)<br />

North America\Canada Katz Group (The) Drug Trading $1.65 n/a n/a<br />

North America\Canada Katz Group (The) Medicine Shoppe $0.12 n/a n/a<br />

North America\Canada Katz Group (The) Pharmx Rexall $2.06 $2.97 $3.81 7.6% 5.1%<br />

Store counts<br />

Continent\Country <strong>Retail</strong>er Banner<br />

Stores CAGR<br />

2007 2012E 2017E<br />

(2007 -<br />

2012E)<br />

North America\Canada Katz Group (The) Drug Trading 645 - - n/a n/a<br />

North America\Canada Katz Group (The) Medicine Shoppe 128 - - n/a n/a<br />

North America\Canada Katz Group (The) Pharmx Rexall 670 900 1000 6.1% 2.1%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Featuring Air Miles Cash on end-cap<br />

Rexall marketing its “Save $2” on Rx co-pay on<br />

Ontario<br />

New Be. better private label brand<br />

Compare and save with private label shelf tag<br />

Gender<br />

Age<br />

Income<br />

Marital<br />

Past 4-Week<br />

Grocery/HBA<br />

Shopper<br />

Penetration<br />

Total 10%<br />

Male 9%<br />

Female 10%<br />

18-34 yrs 8%<br />

35-54 yrs 9%<br />

55+ yrs 12%<br />

Rite Aid<br />

Key Initiatives<br />

Growth of Wellness+<br />

Investing in best-performing stores<br />

Continuing to find inefficiencies<br />

Expanding health care offering<br />

Improve customer service<br />

Key Players<br />

John T. Standley- Chairman, President and CEO<br />

Ken Martindale- Senior EVP & COO<br />

Frank Vitrano- Senior EVP, CFO & CAO<br />

Tony Montini- EVP, Merchandising<br />

Robert I. Thompson- EVP, Pharmacy<br />

Robert (Bob) K. Thompson- EVP, Store Operations<br />

Christopher Hall- SVP, Pharmacy Services<br />

Susan Henderson- SVP & Chief Communications<br />

Officer<br />

Stengths<br />

Number three chain, leading East Coast presence<br />

Seasoned mgmt team<br />

Relationships with customers, Rx focus<br />

Health condition marketing platforms<br />

Collaborative vendor relationships<br />

Strategic partnerships with GNC, McKesson,<br />

Lindora etc.<br />

Wellness store format<br />

Wellness+ Loyalty program<br />

Opportunities<br />

Up-side opportunity to close sales and<br />

profitability gap with peers<br />

Market share gains from the Express Scripts/<br />

Walgreens split<br />

Mix of male and ethnic shoppers<br />

Wellness+ Loyalty Program<br />

Retain shoppers gained during the Walgreens/<br />

Express Script dispute<br />

Wellness store remodels<br />

Mobile and Ecommerce expansion<br />

David Kelly- SVP, Store Development<br />

John Learish- SVP, Marketing<br />

Wilson A Lester, Jr- SVP, Supply Chain<br />

Daniel Miller- SVP, Pharmacy Operations<br />

Jon Olson- SVP, Merchandising<br />

Bill Bergin- Group Vice President, Category<br />

Management<br />

Ernie Richardsen- Group Vice President,<br />

Pharmaceutical Purchasing and Clinical Services<br />

Weaknesses<br />

Less convenient real-estate<br />

Lack #1 or #2 share in many markets<br />

Sales productivity (FE & Rx)<br />

Weaker credit profile<br />

Inconsistent operational execution<br />

Underdeveloped healthcare strategy, pricing and<br />

promotional strategy<br />

Threats<br />

Exposure to economic, industry and competitive<br />

pressures<br />

Pressure on Rx margins<br />

More direct and intense competition<br />

Failure to grow store base<br />

Staffing – both front-end and pharmacy<br />

Failure to meet customer expectations<br />

Low Rx volumes (further erosion)

Rite Aid<br />

Sales & Store Forecasts<br />

Sales in billions<br />

of US Dollar<br />

2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

'12E - '17E<br />

CAGR<br />

Rite Aid 26.44 25.18 26.4 -0.97% 0.95%<br />

TOTAL USA 26.44 25.18 26.4 -0.97% 0.95%<br />

# of Stores 2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

'12E - '17E<br />

CAGR<br />

Rite Aid 5,059 4,609 4,525 -1.85% -0.37%<br />

TOTAL USA 5,059 4,609 4,525 -1.85% -0.37%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Rite Aid Shopper Cross-Shopping in<br />

Drug Channel (Q3 2012)<br />

CVS/pharmacy 45%*<br />

Walgreens 40%<br />

Read as: 45% of Rite Aid shoppers also shop at CVS<br />

Top 5 <strong>Retail</strong>ers Outside Drug Channel Cross-<br />

Shopped by Rite Aid Shoppers<br />

(Q3 2012)<br />

Walmart/Walmart Supercenter 64%*<br />

Amazon.com 56%<br />

Target/SuperTarget 50%<br />

The Home Depot 39%<br />

Dollar Tree 37%<br />

Read as: 64% of Rite Aid shoppers also shop at Walmart<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape ®, July-September 2012

Shoppers Drug Mart<br />

Key Initiatives<br />

Front End<br />

Beauty<br />

Category Mgmt<br />

Promotion Optimization / Optimum<br />

New Services<br />

Key Players<br />

Domenic Pilla- President & Chief Executive Officer<br />

Paul Damiani- Executive Vice-President, Operations<br />

Dorian Lo- Executive Vice-President, Pharmacy and Healthcare<br />

Bradley Lukow- Executive Vice-President & Chief Financial Officer<br />

Michael Motz- Chief Merchandising Officer<br />

Mary-Alice VuicicChief Administrative Officer & Executive Vice-President, Human Resources<br />

Frank Pedinelli- Senior Vice-President, Legal Affairs & General Counsel<br />

Stengths<br />

Strong brand, loyal shopper base<br />

Broad store presence, convenience trip<br />

Private label strength<br />

Optimum loyalty card program<br />

Authority in high-end beauty, wellness<br />

Merchandising, in-store aesthetics<br />

Opportunities<br />

Geographic store growth (i.e. QC, BC)<br />

Within channel competitors struggling –<br />

acquisition opportunity<br />

Further diversify formats – Simply Pharmacy,<br />

Home Health Care, etc.<br />

Expand services – financial products, the role of<br />

the Pharmacist<br />

Serving the aging population<br />

Ecommerce development, particularly for beauty<br />

Pharmacy<br />

Seniors<br />

Consolidation/Expansions<br />

Long-term care/Specialty<br />

Services- Scope of practice<br />

Weaknesses<br />

Value perception on consumables<br />

Supply chain and backroom problems on high<br />

velocity SKUs, out-of-stocks<br />

High mix of sales from pharmacy<br />

Inconsistent store execution<br />

Threats<br />

Reliance on Pharmacist operators in franchise<br />

model may limit flexibility<br />

Rising competition (i.e., Walmart, Loblaw, Target)<br />

Added margin pressure from government<br />

regulations, drug reform<br />

Over-indexing on private label vs. national brands<br />

at the expense of the basket, trip<br />

Economic uncertainty, cautious consumers

Shoppers Drug Mart<br />

Sales & Store Forecasts<br />

Sales<br />

Country <strong>Retail</strong>er Banner<br />

Sales (CND Billions) CAGR<br />

2007 2012E 2017E<br />

(2007 -<br />

2012E)<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

(2012E-<br />

2017E)<br />

Canada Drugstore no prescriptions Shoppers Home Health Care $0.48 $0.49 $0.52 0.3% 1.3%<br />

Canada Drugstore with prescriptions Paragon Pharmacy $0.07 $0.08 n/a 3.4%<br />

Canada Drugstore with prescriptions Pharmaprix $0.98 $1.42 $1.74 7.9% 4.1%<br />

Canada Drugstore with prescriptions Shoppers Drug Mart $7.02 $8.39 $10.30 3.6% 4.2%<br />

Canada Drugstore with prescriptions Shoppers Simply Pharmacy $0.44 $0.61 n/a 7.0%<br />

Canada Health & Beauty Specialist Murale - $0.05 $0.05 n/a 2.4%<br />

Stores<br />

Country <strong>Retail</strong>er Banner<br />

Stores CAGR<br />

2007 2012E 2017E<br />

(2007 -<br />

2012E)<br />

(2012E-<br />

2017E)<br />

Canada Drugstore no prescriptions Shoppers Home Health Care 64 62 62 -0.6% 0.0%<br />

Canada Drugstore with prescriptions Paragon Pharmacy - 19 19 n/a 0.0%<br />

Canada Drugstore with prescriptions Pharmaprix 129 180 202 6.9% 2.3%<br />

Canada Drugstore with prescriptions Shoppers Drug Mart 928 1060 1106 2.7% 0.9%<br />

Canada Drugstore with prescriptions Shoppers Simply Pharmacy - 55 74 n/a 6.1%<br />

Canada Health & Beauty Specialist Murale - 6 6 n/a 0.0%<br />

Gender<br />

Age<br />

Income<br />

Marital<br />

Status<br />

Past 4-Week<br />

Grocery/HBA<br />

Shopper Penetration<br />

Total 43%<br />

Male 40%<br />

Female 45%<br />

18-35 yrs 40%<br />

35-54 yrs 43%<br />

55 yrs 43%<br />

Thrifty White Pharmacy<br />

Corportate Info + Services<br />

Employee owned pharmacy operating in Montana, North Dakota,<br />

Minnesota, Wisconsin, and Iowa<br />

Mission Statement:Long term assets:<br />

Our customer<br />

Our employee owners<br />

We will provide for the health care needs of our customers through:<br />

Professional pharmacy services<br />

Quality products<br />

Unique and innovative practices<br />

Services<br />

Med Synch synchronizes prescription refill service<br />

Healthy Pack Rx organizes all scripts into individual packets labeled<br />

with all medications, date and time to be taken<br />

Ready Refill auto prescription refill service<br />

Medication Therapy Management<br />

Pet medications<br />

Photo printing<br />

Shopper rewards card<br />

Prescription savings club<br />

Sales & Store Forecasts<br />

Sales in millions of<br />

US Dollar<br />

2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

“We will operate in an<br />

environment where our<br />

employees can learn,<br />

grow, and prosper”<br />

'12E - '17E<br />

CAGR<br />

Thrifty White 302.85 383.47 418.39 4.8% 1.8%<br />

TOTAL USA 302.85 383.47 418.39 4.8% 1.8%<br />

# of Stores 2007 2012E 2017E<br />

'07 - '12E<br />

CAGR<br />

'12E - '17E<br />

CAGR<br />

Thrifty White 68 83 87 4.1% 1.0%<br />

TOTAL USA 68 83 87 4.1% 1.0%

Ulta<br />

Key Initiatives<br />

Growth StrategyAccelerate pace of new store expansion – 1,200 store plan for the U.S.<br />

Expanded square footage by 16% in 2011<br />

2011 comps of 10.9%<br />

Continue to expand offering with new products, services and brands<br />

Enhance loyalty program<br />

9 million active members<br />

ULTAmate Rewards is the new program being rolled out<br />

Tailored one-on-one initiatives to customers<br />

Broaden marketing reach<br />

Increase focus on ULTA.com to support multichannel<br />

Key Players<br />

Chuck Rubin- President and Chief Executive Officer<br />

Scott Settersten- Chief Financial Officer & Assistant Secretary<br />

Robert S. Guttman- Senior Vice President, General Counsel & Secretary<br />

Janet TaakeSenior- Vice President, Merchandising<br />

Cynthia PayneSenior- Vice President, Store Operations<br />

Vincent A. Scarfone- Senior Vice President, Human Resources<br />

Jeffrey Severts- Senior Vice President, Marketing<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Health and Beauty Specialist Ulta 908.2 2102.3 3975.4 18.3% 13.6%<br />

Mail Order Ulta 1.7 2.0 2.2 2.9% 2.6%<br />

Online <strong>Retail</strong> ulta.com 2.2 8.4 29.0 29.2% 29.2%<br />

TOTAL USA 912.14 2,112.66 4,006.60 18.29% 13.66%<br />

# of Stores Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Health and Beauty Specialist Ulta 249 539 884 16.7% 10.4%<br />

TOTAL USA 249 539 884 16.7% 10.4%

Walgreens<br />

Key Initiatives<br />

Delivering the Well Experience- Converting stores to the Well Experience, expanding flagship and food<br />

oasis stores, growing other mediums like mobile and online, expanding Balance Rewards<br />

Transforming Community Pharmacy- Expanding the role of pharmacists in healthcare, growing clinic<br />

services<br />

Creating an Unprecedented Global Platform- Leveraging Alliance Boots partnership, capitalizing on<br />

growing generic market and demand for health & wellbeing product<br />

Key Players<br />

Sona Chawla- President, E-Commerce<br />

Bryan Pugh- VP Well Experience Deployment, Merchandising team lead since Magnacca’s departure<br />

Graham Atkinson- SVP, Chief Customer Experience Officer, Leads Balance Rewards<br />

Wade Miquelon- EVP, CFO, President, International, Leads Value Creation Services and International<br />

Division, On Alliance Boots board of directors<br />

Robert Zimmerman- SVP of International & International Chief Administration Officer, Leads Global<br />

Mergers & Acquisitions “synergy team,” On Alliance Boots board of directors<br />

Stefano Pessina- Executive Chairman of Alliance Boots, Serves on Walgreens board of directors<br />

Stengths<br />

Best-in-class real estate and systems<br />

Most convenient locations in U.S.<br />

Dominant market share and iconic brand<br />

Trusted pharmacy<br />

Industry-leading sales & asset productivity<br />

Operational excellence<br />

Healthy cash and balance sheet position<br />

Strong credit rating<br />

Opportunities<br />

Aging of the population, growing demand for<br />

healthcare products and services<br />

Realignment of costs, cultures, and capabilities<br />

Format updates: Well Experience, food oasis,<br />

flagship<br />

Growth of E-Commerce<br />

Multi-channel retailing with mobile apps and Web<br />

Pickup<br />

Expansion into adjacent sectors of pharmacy and<br />

healthcare (specialty Rx)<br />

Weaknesses<br />

Limited price or competitive differentiation<br />

In-store experience<br />

Limited tools, data, and processes for obtaining<br />

shopper insights<br />

SKU intensive, low inventory turn front-end<br />

assortment<br />

Rx as proportion of sales (low margin)<br />

Threats<br />

Slowing economy<br />

Increasing unemployment<br />

Declining script trends and utilization<br />

Small box hybrid formats<br />

More direct competition from CVS<br />

Pressure on pharmacy reimbursement rates and<br />

pricing model (AMP/AWP)<br />

Shortage of qualified stores managers,<br />

pharmacists, and nurse practitioners<br />

Loss of Express Scripts business

Walgreens<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

TOTAL Puerto Rico 1,390.00 2,023.58 2,794.96 7.8% 6.7%<br />

US Drugstore with prescriptions 50,065.23 64,444.00 79,878.14 5.2% 4.4%<br />

Online <strong>Retail</strong> - 955.79 1,791.67 - 13.4%<br />

TOTAL USA 50,065.23 65,399.79 81,669.80 5.5% 4.5%<br />

# of Stores 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

TOTAL Puerto Rico 63 113 123 12.4% 1.7%<br />

TOTAL USA 5,809 7,821 8,840 6.1% 2.5%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data

Participating Grocery <strong>Retail</strong>ers

Ahold USA<br />

Key Initiatives<br />

Continue to grow market share by executing targeted initiatives by division<br />

Focused on enhancing price image by monitoring key value items, executing targeted price investments,<br />

and having a multi-variable pricing and promotions engine.<br />

Investing in private label portfolio<br />

Continue to refresh stores to improve the shopping experience.<br />

Growth of its Peapod, online business.<br />

Key Players<br />

James McCann- Ahold USA COO<br />

Don Sussman- New York Metro President<br />

Rick Herring- Giant Carlisle President<br />

Anthony Hucker- Giant Landover President<br />

Joe Kelly- New England President<br />

Stengths<br />

Strong brand recognition<br />

Strong real estate in valuable markets<br />

Share leader in core markets<br />

High store productivity level<br />

Strong management skills<br />

Increasingly competitive prices<br />

Balanced growth strategy at corporate level<br />

Use of in-store technology<br />

Opportunities<br />

Continued expansion of Peapod<br />

Partnership with EYC to build out shoppers<br />

insights program<br />

Greater use of in-store technology<br />

Center store innovation programs<br />

Weaknesses<br />

High fixed cost investment per store (requires<br />

very high ROI)<br />

Poor performance and market share in peripheral<br />

markets<br />

Lack of clear differentiator<br />

Private label brands need continued development<br />

Threats<br />

Growing presence of low-price competitors (i.e.,<br />

Walmart)<br />

Traditional and new channel competition (limitedassortment,<br />

warehouse clubs)<br />

Other retailers’ greater focus on health and<br />

wellness.

Ahold USA<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar<br />

Country Format Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

USA Convenience Giant to Go - 11 30 - -<br />

USA Online Grocery Peapod 329 503 751 8.9% 8.3%<br />

USA Supermarket Giant Food 3,802.62 5,144.00 6,431.00 6.2% 4.6%<br />

USA Supermarket Giant MD 4,854.64 5,554.00 6,147.00 2.7% 2.0%<br />

USA Supermarket Martins Foodstores (VA) 504.38 1,045.00 1,118.00 15.7% 1.4%<br />

USA Supermarket Stop & Shop 11,474.32 13,664.69 16,085.64 3.6% 3.3%<br />

USA TOTAL Supermarket 20,635.96 25,407.69 29,781.64 4.2% 3.2%<br />

TOTAL USA 20,964.96 25,921.69 30,562.64 4.3% 3.3%<br />

# of Stores<br />

Country Format Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

USA Convenience Giant to Go - 3 8 - -<br />

USA Online Grocery Peapod 0 0 0<br />

USA Supermarket Giant Food 120 148 155 4.3% 0.9%<br />

USA Supermarket Giant MD 171 177 184 0.7% 0.8%<br />

USA Supermarket Martins Foodstores (VA) 25 52 52 15.8% 0.0%<br />

USA Supermarket Stop & Shop 389 404 418 0.8% 0.7%<br />

USA TOTAL Supermarket 705 781 809 2.1% 0.7%<br />

TOTAL USA 705 784 817 2.1% 0.8%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Total<br />

Top 25 <strong>Retail</strong>ers Shopped during Past 4 Weeks<br />

Monthly Ahold*<br />

Shoppers<br />

3737<br />

Ahold* 100%<br />

CVS/pharmacy 60%<br />

Amazon.com 55%<br />

Walmart/Walmart Supercenter 54%<br />

Target/SuperTarget 50%<br />

The Home Depot 38%<br />

Kohl's 37%<br />

Staples 34%<br />

Macy's 34%<br />

Liquor/Wine Stores 30%<br />

Low e's 29%<br />

Walgreens 29%<br />

Best Buy 28%<br />

Barnes & Noble 27%<br />

JCPenney 27%<br />

Rite Aid 26%<br />

Dollar Tree 26%<br />

Bed Bath & Beyond 25%<br />

BJ's Wholesale Club 24%<br />

Hallmark 23%<br />

eBay.com 22%<br />

Trader Joe's 21%<br />

Michaels<br />

Other traditional<br />

supermarket/grocery store retailer<br />

20%<br />

not listed here (e.g., Basha's, Tops) 20%<br />

Costco 20%<br />

ShopRite 19%<br />

*includes Stop & Shop, Giant Foods<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Nov 2011 - Jan <strong>2013</strong>

HEB<br />

Key Initiatives<br />

Develop sophisticated marketing capabilities and a clearly defined brand.<br />

Capitalizing on emerging health & wellness trends within the grocery channel.<br />

Continue to push its value position through its “Compare our Prices to Anyone” campaign.<br />

Relying more on customer loyalty in the face of increased competition. Focusing on tailoring stores and<br />

product assortment by market.<br />

Key Players<br />

Charles Butt- CEO<br />

Martin Otto- CFO<br />

Craig Boyan- President & COO<br />

Scott McClelland- President, Houston/Central Market Division<br />

Suzanne Wade- President, San Antonio Food & Drug Division<br />

Stengths<br />

Strong market share in Texas<br />

Market expertise<br />

Strong customer loyalty/brand recognition<br />

Strong presence in Hispanic segment<br />

International presence (stores in Mexico)<br />

Privately owned<br />

Willingness to experiment with new formats<br />

Culture of innovation<br />

Opportunities<br />

Format expansion (Central Market, Plus!, Joe V)<br />

Increased penetration of Mexican market<br />

Additional expansion within Texas<br />

Increasing price optimization capabilities<br />

Weaknesses<br />

Consumer insight strategy under-developed at<br />

operational levels<br />

Capital constrained (not public)<br />

Less transparency of company’s performance<br />

and operations<br />

Most stores in Texas– risk not spread out if Texas<br />

faces downturn<br />

Threats<br />

High levels of competition from highly skilled<br />

retailers<br />

Challenged to move from ethnic expertise to local<br />

expertise (e.g., in Mexico)

HEB<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar<br />

Country Format Banner 2007 2012E 2017E<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

07 - '12E<br />

CAGR<br />

'07 - '17E<br />

CAGR<br />

USA Soft Discount Ltd Asst Grcy Joe Vs Smart Shop - 51.48 147.72 - -<br />

USA Supermarket Central Market 376.39 406.5 560.5 1.6% 6.6%<br />

USA Supermarket H-E-B 11,461.86 15,694.27 20,417.50 6.5% 5.4%<br />

USA Supermarket HEB Hybrid 66 310.4 362.9 36.3% 3.2%<br />

USA Supermarket HEB Plus 468 1,315.90 1,957.30 23.0% 8.3%<br />

USA Supermarket Mi Tienda 14.94 39.9 57.5 21.7% 7.6%<br />

USA Supermarket Pantry 255.52 - - - -<br />

USA TOTAL Supermarket 12,642.72 17,766.97 23,355.70 7.0% 5.6%<br />

TOTAL USA 12,642.72 17,818.46 23,503.42 7.1% 5.7%<br />

# of Stores<br />

Country Format Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

USA Soft Discount Ltd Asst Grcy Joe Vs Smart Shop - 6 12 - -<br />

USA Supermarket Central Market 8 9 11 2.4% 4.1%<br />

USA Supermarket H-E-B 253 266 282 1.0% 1.2%<br />

USA Supermarket HEB Hybrid 3 7 7 18.5% 0.0%<br />

USA Supermarket HEB Plus 15 32 47 16.4% 8.0%<br />

USA Supermarket Mi Tienda 1 2 2 14.9% 0.0%<br />

USA Supermarket Pantry 9 - - - -<br />

USA TOTAL Supermarket 289 316 349 1.8% 2.0%<br />

TOTAL USA 289 322 361 2.2% 2.3%<br />

Top 25 <strong>Retail</strong>ers Shopped during Past 4 Weeks<br />

Monthly HEB*<br />

Shoppers<br />

Total 2014<br />

HEB* 100%<br />

Walmart/Walmart Supercenter 77%<br />

Amazon.com 50%<br />

Walgreens 49%<br />

Target/SuperTarget 47%<br />

The Home Depot 38%<br />

CVS/pharmacy 34%<br />

Low e's 33%<br />

Dollar General 33%<br />

JCPenney 31%<br />

Kohl's 29%<br />

Best Buy 27%<br />

Sam's Club 27%<br />

Dollar Tree 26%<br />

Macy's 26%<br />

Family Dollar 24%<br />

Valero/Diamond Shamrock 24%<br />

Barnes & Noble 23%<br />

eBay.com 23%<br />

Office Depot 21%<br />

Bed Bath & Beyond 21%<br />

PetSmart 21%<br />

Netflix 20%<br />

Kroger/Kroger Marketplace/Kroger Fresh Fare 19%<br />

Sears 18%<br />

Shell 18%<br />

*includes HEB,HEB Plus, Central Market<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Nov 2011 - Jan <strong>2013</strong>

Hy-Vee<br />

Key Initiatives<br />

Focus on its capital improvement plan which includes developing stores in new markets and renovating<br />

stores in existing locations.<br />

Reassert itself in certain categories in order to modernize and better fit its customer lifestyles.<br />

Private label will play a larger role in marketing its value proposition.<br />

Continue to grow its digital footprint by enhancing in-store technologies as well as grow its social media<br />

presence.<br />

Increase its health focus by participating in the “Healthiest State Initiative,” while providing services and<br />

programs that promote healthy living/healthy lifestyles.<br />

Key Players<br />

Randall Edeker- Chairman & CEO<br />

Mike Skokan- CFO<br />

Ron Taylor- EVP North Division<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

Drugstore with prescriptions Hy Vee 228.8 325.34 373.88 7.3% 2.8%<br />

Supermarket Hy Vee 5,371.20 7,031.28 8,381.78 5.5% 3.6%<br />

TOTAL USA 5,600.00 7,356.62 8,755.66 5.6% 3.5%<br />

# of Stores Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

Drugstore with prescriptions Hy Vee 35 45 47 5.2% 0.9%<br />

Supermarket Hy Vee 197 218 230 2.0% 1.1%<br />

TOTAL USA 232 263 277 2.5% 1.0%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Jon Wendel- EVP West Division<br />

Tom Watson-EVP East Division<br />

Jay Marshall- President of Marketing & Merch<br />

Top 25 <strong>Retail</strong>ers Shopped during Past 4 Weeks<br />

Total<br />

Monthly HyVee<br />

Shoppers<br />

2402<br />

Hy-Vee 100%<br />

Walmart/Walmart Supercenter 79%<br />

Target/SuperTarget 51%<br />

Amazon.com 50%<br />

Walgreens 49%<br />

Kohl's 41%<br />

JCPenney 36%<br />

Menard's 33%<br />

Dollar General 33%<br />

ALDI 27%<br />

Sam's Club 27%<br />

Best Buy 25%<br />

Kmart/Big Kmart 25%<br />

Dollar Tree 25%<br />

eBay.com 24%<br />

Low e's 23%<br />

QuikTrip 21%<br />

Barnes & Noble 21%<br />

The Home Depot 20%<br />

Hallmark 20%<br />

CVS/pharmacy 19%<br />

Netflix 16%<br />

Sears 16%<br />

Ace Hardw are<br />

Personal Care/Beauty <strong>Retail</strong>ers (e.g.,<br />

16%<br />

Bath & Body Works, Sephora, The<br />

Body Shop)<br />

15%<br />

Staples 15%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Nov 2011 - Jan <strong>2013</strong>

Meijer<br />

Key Initiatives<br />

Leveraging digital and online tools that allow Meijer to offer targeted deals and create a personalized<br />

shopping experience.<br />

Continue to develop strategies that help promote Meijer’s commitment to offering healthy living solutions<br />

for its shoppers.<br />

Grow its footprint in existing and new markets.<br />

Continue to experiment with social media to push marketing messages.<br />

Key Players<br />

Hank Meijer- Co-Chairman & CEO<br />

Mark Murray- Co-CEO<br />

Jim Walsh- CFO<br />

J.K. Symancyk- President<br />

Janet Emerson- EVP of <strong>Retail</strong> Operations<br />

Stengths<br />

Privately owned-longer term vision compared to<br />

publicly owned retailers<br />

Strong brand recognition and loyal customer base<br />

Strong track record of successful food operations<br />

Prime real estate locations<br />

Strong supply chain<br />

Will negotiate hard to get the right product at the<br />

right price<br />

Price leadership and strong value perception<br />

Opportunities<br />

Experimentation with destination departments<br />

Further improve price perception in the market<br />

Format experimentation and innovation<br />

Develop health and wellness theme<br />

Senior management interaction with other bestin-class<br />

privately owned grocers<br />

Shopper data mining<br />

Weaknesses<br />

Private ownership constrains capital availability<br />

Smaller company wields less leverage in global<br />

sourcing than larger competitors like Walmart<br />

Primary markets’ economies vulnerable to<br />

declining base of manufacturing jobs, including<br />

the US automakers<br />

Meijer has a defined EDLP strategy, but has<br />

multiple messages which may confuse shoppers<br />

Threats<br />

Competitive environment: Walmart, Costco,<br />

Kroger<br />

Shopability: Not as convenient to navigate<br />

Undiversified business model<br />

Operates unionized markets<br />

Losing share of wallet due to changing economic<br />

conditions and trends away from stock up trips<br />

Known as a promotional supercenter which<br />

conflicts with edlp strategy.

Meijer<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar<br />

Country Format Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

USA Online Grocery meijer.com 2.8 52.37 111.72 79.6% 16.4%<br />

USA Supercenter Meijer 13,560.00 15,824.00 18,383.10 3.1% 3.0%<br />

TOTAL USA 13,562.80 15,876.37 18,494.82 3.2% 3.1%<br />

# of Stores<br />

Country Format Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

USA Online Grocery meijer.com 0 0 0 - -<br />

USA Supercenter Meijer 181 198 202 1.8% 0.4%<br />

TOTAL USA 181 198 202 1.8% 0.4%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Top 25 <strong>Retail</strong>ers Shopped during Past 4 Weeks<br />

Monthly Meijer<br />

Shoppers<br />

Total 2402<br />

Meijer 100%<br />

Walmart/Walmart Supercenter 62%<br />

Amazon.com 52%<br />

Kohl's 49%<br />

Kroger/Kroger<br />

Marketplace/Kroger Fresh 49%<br />

Walgreens 45%<br />

Target/SuperTarget 45%<br />

JCPenney 36%<br />

Dollar Tree 33%<br />

Low e's 32%<br />

Best Buy 31%<br />

The Home Depot 31%<br />

CVS/pharmacy 30%<br />

Speedw ay 29%<br />

Sam's Club 29%<br />

Dollar General 28%<br />

ALDI 27%<br />

Macy's 27%<br />

eBay.com 26%<br />

Menard's 26%<br />

Kmart/Big Kmart 25%<br />

Bed Bath & Beyond 24%<br />

Barnes & Noble 24%<br />

Hallmark 24%<br />

Staples 22%<br />

Family Dollar 22%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Nov 2011 - Jan <strong>2013</strong>

Safeway<br />

Key Initiatives<br />

Develop a wellness platform aimed to grow ID sales and build Safeway’s brand.<br />

Expanding its fuel, loyalty program to enhance its value proposition.<br />

Continue to enhance its just for U digital saving platform to increase shopper loyalty.<br />

Re-inventing the Lifestyle format by adding new innovative, merchandising initiatives on top of newly<br />

designed marketing and promotions.<br />

Key Players<br />

Steve Burd- Chairman & CEO (retiring May <strong>2013</strong>-successor unknown)<br />

Robert Edwards- President<br />

Peter Bocian- EVP &CFO<br />

Diane Dietz- EVP Chief Marketing Officer<br />

Stengths<br />

Significant market share in major markets<br />

Real estate (locations) and high percentage of<br />

stores are Lifestyle format<br />

Strong Corporate Brands program<br />

Financially minded<br />

Blackhawk Network<br />

Social media/digital marketing competencies<br />

Use of social media and digital marketing<br />

Opportunities<br />

Continued development of Optura• Price<br />

optimization<br />

Alternative growth engines (Blackhawk, Safeway<br />

Health)<br />

Third-party distribution of private label items<br />

Private label development that aligns with<br />

shopper trends<br />

Continued expansion of online/digital platforms<br />

and growing online sales<br />

Continued expansion in health initiatives<br />

Weaknesses<br />

Profitability issues<br />

Margins remain high<br />

Declines in traffic counts and basket size<br />

No clear strategic response to current sales<br />

challenges<br />

Fixed cost structure is high<br />

Centralized merchandising strategy<br />

Expansion markets under-perform relative to<br />

chain<br />

Pricing Image<br />

Threats<br />

Competition from Walmart, Costco, Target,<br />

Kroger, and more regional operators<br />

Competitors’ shopper insight programs<br />

Questionable long-term commitment to valueconscious<br />

shoppers<br />

Labor disputes/talent retention<br />

Continued high price perception amongst<br />

shoppers

Safeway<br />

Sales & Store Forecasts<br />

Sales in millions of US Dollar<br />

Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

Safeway Canada 5,253.44 5,411.92 5,699.31 0.6% 1.0%<br />

TOTAL Canada 5,253.44 5,411.92 5,699.31 0.6% 1.0%<br />

safeway.com 79.76 562.65 2,738.97 47.8% 37.2%<br />

Great Alaska Tobacco Company 16.78 17.98 18.84 1.4% 0.9%<br />

Oaken Keg 58.27 7.96 8.31 -32.8% 0.9%<br />

TOTAL Other Category Specialist 75.05 25.93 27.15 -19.1% 0.9%<br />

Carrs 348.26 374.85 393.97 1.5% 1.0%<br />

Dominicks 2,258.41 1,814.62 1,450.67 -4.3% -4.4%<br />

Eagle 166.87 174.28 183.17 0.9% 1.0%<br />

Genuardi 1,106.47 - - - -<br />

Pak n Save 207.18 223.34 239.17 1.5% 1.4%<br />

Pavilions 680.06 701.99 696.34 0.6% -0.2%<br />

Randalls Food Markets 1,326.02 1,232.49 1,194.68 -1.5% -0.6%<br />

Safeway 22,960.52 23,635.51 24,507.69 0.6% 0.7%<br />

The Market - 28.37 31.35 - 2.0%<br />

Tom Thumb 1,616.70 1,707.87 1,765.17 1.1% 0.7%<br />

Vons 5,471.45 5,332.21 5,491.65 -0.5% 0.6%<br />

TOTAL Supermarket 36,141.94 35,225.53 35,953.84 -0.5% 0.4%<br />

TOTAL USA 36,296.75 35,814.11 38,719.96 -0.3% 1.6%<br />

# of Stores<br />

Banner 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12 - '17E<br />

CAGR<br />

Safeway Canada 222 222 219 0.0% -0.3%<br />

TOTAL Canada 222 222 219 0.0% -0.3%<br />

Great Alaska Tobacco Company 7 7 7 0.0% 0.0%<br />

Oaken Keg 8 1 1 -34.0% 0.0%<br />

TOTAL Other Category Specialist 15 8 8 -11.8% 0.0%<br />

Carrs 13 13 13 0.0% 0.0%<br />

Dominicks 82 64 53 -4.8% -3.7%<br />

Eagle 7 7 7 0.0% 0.0%<br />

Genuardi 42 - - - -<br />

Pak n Save 11 11 11 0.0% 0.0%<br />

Pavilions 30 31 29 0.7% -1.3%<br />

Randalls Food Markets 49 44 42 -2.1% -0.9%<br />

Safeway 943 919 917 -0.5% 0.0%<br />

The Market - 2 2 - 0.0%<br />

Tom Thumb 63 66 65 0.9% -0.3%<br />

Vons 265 246 243 -1.5% -0.2%<br />

TOTAL Supermarket 1,505 1,403 1,382 -1.4% -0.3%<br />

TOTAL USA 1,520 1,411 1,390 -1.5% -0.3%

Safeway<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Top 25 <strong>Retail</strong>ers Shopped during Past 4 Weeks<br />

Monthly Safeway*<br />

Shoppers<br />

Total 6273<br />

Safew ay* 100%<br />

Amazon.com 56%<br />

Target/SuperTarget 54%<br />

Walmart/Walmart Supercenter 53%<br />

Costco 42%<br />

Walgreens 41%<br />

The Home Depot 39%<br />

CVS/pharmacy 38%<br />

Kohl's 32%<br />

Macy's 32%<br />

Trader Joe's 31%<br />

JCPenney 29%<br />

Dollar Tree 29%<br />

Best Buy 27%<br />

Low e's 25%<br />

Bed Bath & Beyond 24%<br />

eBay.com 24%<br />

Barnes & Noble 24%<br />

Staples 23%<br />

Michaels 23%<br />

Albertsons 22%<br />

Rite Aid 22%<br />

Vons 21%<br />

Netflix 20%<br />

PetSmart 19%<br />

7-Eleven 19%<br />

*includes Safeway, Randalls, Dominick's, Tom Thumb, Vons<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Nov 2011 - Jan <strong>2013</strong>

Schnucks<br />

Key Initiatives<br />

Expansion via new store growth and single store acquisition<br />

Offering value added services, i.e., cooking school, special order service, fuel rewards, recipe ideas, etc.<br />

Offering full pharmacy services such as online refills, generic drugs, health screenings, immunizations<br />

In May 2012 it opened its first full-service standalone pharmacy on the site of the St. John’s Hospital in<br />

Springfield, Illinois<br />

“Piece of Mind Quality” initiative that highlights above standard food safety and quality guidelines<br />

pertaining to perishable categories<br />

Development and launch of Culinaria, hybrid urban grocery store combining an upscale experience and<br />

high end assortment with Schnucks pharmacy and HBA offer<br />

Key Players<br />

Scott C. Schnuck: Chairman of the Board and CEO<br />

Todd R. Schnuck: President and COO<br />

Mark J. Schnuck: VP Shopping Center Development<br />

Edwin H. Schnuck: Co-Founder<br />

Anna Donovan Schnuck: Co-Founder<br />

David Bell: CFO<br />

Sales & Store Forecasts<br />

Sales in millions<br />

of US Dollar<br />

2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

schnucks.com 32.26 59.55 122.94 13.04% 15.60%<br />

Hilander - 143.64 247.73 - 12%<br />

Logli 258.1 267.39 280.75 0.71% 0.98%<br />

Schnucks<br />

TOTAL<br />

2,043.11 2,198.85 2,056.35 1.48% -1.33%<br />

Supermarket 2,301.21 2,609.88 2,584.83 2.55% -0.19%<br />

TOTAL USA 2,333.47 2,669.43 2,707.77 2.73% 0.29%<br />

# of Stores 2007 2012E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Hilander - 6 8 - 6%<br />

Logli 5 5 5 0.00% 0.00%<br />

Schnucks 99 98 86 -0.20% -2.58%<br />

TOTAL USA 104 109 99 0.94% -1.91%

SuperValu<br />

Key Initiatives<br />

On 10 January <strong>2013</strong>, Supervalu announced that it had entered an agreement to sell five of its traditional retail<br />

banners to Cerberus affiliate AB Acquisition LLC for approximately USD 3.3 billion. Additionally, a Cerberusled<br />

investor consortium called Symphony Investors will conduct a tender offer on up to 30% of Supervalu’s<br />

outstanding common stock. Details are below:<br />

Sale of <strong>Retail</strong> Banners<br />

The retail banners to be sold to AB Acquisition LLC include Albertsons, Acme, Jewel-Osco, Shaw’s and<br />

Star Market along with associated Osco and Sav-On in store pharmacies.<br />

The Albertsons banner will be recombined with existing Cerberus owned Albertsons LLC.<br />

These five banners, covering 877 stores, will comprise the New Albertsons, Inc. (NAI) entity.<br />

Total size of the transaction is approximately 3.2 billion<br />

The transaction is expected to close the week of March 18, <strong>2013</strong><br />

Sale of <strong>Retail</strong> Banners<br />

Upon completion of the sale, Supervalu will consist of its Independent Businesses segment, Save-A-Lot,<br />

and the Cub, Farm Fresh, Shoppers, Shop ‘n Save, and Hornbacher’s banners.<br />

The new Supervalu is expected to generate revenues of approximately USD 17 billion.<br />

Key Players<br />

Sam K. Duncan- Chief Executive Officer and President<br />

Michael Moore- Executive Vice President, Chief Marketing Officer<br />

Janel S. Haugarth- President Independent Business and Business Optimization<br />

Santiago Roces- President and Chief Executive Officer Save-A-Lot<br />

Sherry M. Smith- Executive Vice President, Chief Financial Officer<br />

Kevin Holt- President, Supervalu <strong>Retail</strong><br />

Stengths<br />

National supply chain capabilities<br />

Knowledge of distribution and logistics<br />

Local market relevance<br />

Relatively stronger performance at Save-A-Lot<br />

and Independent Businesses segment<br />

Greater store level autonomy<br />

Opportunities<br />

New technology & analytic tools for store<br />

managers<br />

Growing private label sophistication<br />

Ongoing “value transformation” efforts<br />

Actionable insights from Project THOR initiative<br />

Realigned senior management structure<br />

Divestiture of assets should free up company to<br />

focus on core business units<br />

Weaknesses<br />

Long standing financial constraints<br />

Poor price/value message<br />

<strong>Retail</strong> store systems integration<br />

HQ and divisional misalignment<br />

Criticism of senior management<br />

Poor cash flow<br />

Threats<br />

Debt level remains high<br />

Strong competition (in and outside of channel)<br />

expanding in key markets<br />

Inconsistent management across all levels of<br />

operations<br />

Continuing difficulties with execution<br />

Disruptive management changes adversely<br />

impact internal culture

SuperValu<br />

Sales & Store Forecasts<br />

The Remaining<br />

Supervalu<br />

The New<br />

Albertsons<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Percent of U.S. Households Shopped<br />

Supervalu 1 :<br />

12%<br />

Top 5 <strong>Retail</strong>ers Outside Supermarket Channel<br />

Cross-Shopped by Supervalu 1 Shoppers (Q3 2012)<br />

Walmart/Walmart Supercenter 61%*<br />

Amazon.com 54%<br />

Target/SuperTarget 53%<br />

Walgreens 49%<br />

CVS/pharmacy 42%<br />

*Read as: 61% of Supervalu 1 shoppers also shop at Walmart<br />

Supervalu 1 Shopper Cross-Shopping in<br />

Supermarket Channel (Q3 2012)<br />

Safeway 2 34%*<br />

Kroger 3 26%<br />

Trader Joe’s 24%<br />

Whole Foods 18%<br />

*Read as: 34% of Supervalu 1 shoppers also shop at a Safeway banner<br />

1 Includes Acme, Albertsons, Jewel, and Shaw’s banners<br />

2 Includes Dominick’s, Randalls, Safeway, Tom Thumb , and Vons banners<br />

3 Includes Dillons, Fry’s, King Soopers, Kroger, QFC, Ralphs, and Smith’s banners

Wakefern (PriceRite + ShopRite)<br />

Key Initiatives<br />

Wakefern is committed to providing entrepreneurs and independent retailers with the necessary tools to<br />

succeed in a competitive market. This goal is especially vital to the independent grocer today as it becomes<br />

increasingly difficult to compete with multi-national chains. Wakefern’s core values - integrity, innovation and<br />

teamwork - provide a strong foundation upon which the company has built its business.<br />

Key Players<br />

Joseph Colalillo- Chairman and CEO<br />

Joseph Sheridan- President and COO<br />

Douglas Wille- CFO<br />

Neil Duffy- President, PriceRite<br />

Stengths<br />

Ownership model allows for a high level of<br />

autonomy at the store<br />

Very price competitive<br />

Stores have low operating expenses<br />

High velocity<br />

Strong brand clarity<br />

Divestiture of assets by competitors<br />

Opportunities<br />

Glut of commercial real estate makes for<br />

favorable expansion environment<br />

Tailoring assortment to local shopper base<br />

Continued development of co-branding efforts<br />

(e.g. Kashi)<br />

Divestiture of assets by competitors<br />

Merchandising, Marketing. &<br />

<strong>Kantar</strong> <strong>Retail</strong> ShopperScape®<br />

David Figurelli- President, ShopRite<br />

Supermarkets, Inc.<br />

Chris Lane- SVP, Non-Perishables<br />

Bill Mayo- SVP, Perishables<br />

Weaknesses<br />

Ownership model means in-store conditions can<br />

vary widely by location<br />

Limited opportunities for partnering<br />

Promotional programs tend to be basic<br />

Execution can be an issue<br />

Coordination can be a challenge<br />

Threats<br />

Shopper base exposed to economic downturn<br />

Competition from multiple channels<br />

Operates in a crowded market<br />

Other value oriented, ethnic oriented retailers<br />

Top 25 Food <strong>Retail</strong>ers Shopped During Past 4 Weeks<br />

by Monthly ShopRite Shoppers<br />

Monthly ShopRite<br />

Shoppers<br />

Total 2,908<br />

ShopRite 100%<br />

CVS/pharmacy 53%<br />

Target GM 47%<br />

Walgreens 34%<br />

Walmart Supercenter 34%<br />

Walmart 30%<br />

Rite Aid 30%<br />

Stop & Shop 30%<br />

Dollar Tree 29%<br />

BJ's Wholesale Club 25%<br />

Kmart/Big Kmart 22%<br />

Costco 22%<br />

Waw a 22%<br />

Trader Joe's 19%<br />

7-Eleven 18%<br />

Family Dollar 18%<br />

Pathmark 17%<br />

Dollar General 17%<br />

Whole Foods Market 15%<br />

A&P 13%<br />

ALDI 13%<br />

Sam's Club 12%<br />

Acme 11%<br />

Big Lots 10%<br />

Wegmans 10%<br />

Giant Foods 7%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Oct 2011 – Dec 2012

Wegmans<br />

Key Initiatives<br />

Emphasize green and local initiatives by maintaining energy efficient stores and selling organic and ecofriendly<br />

products.<br />

Focus on value image by clearly communicating edlp and consistent prices to shoppers.<br />

Offer unique and exciting shopping experience through a European Open-Air Market format, SWAS<br />

concepts, wide-variety product mix, etc.<br />

Heightened-levels of customer and in-store services.<br />

Store growth opportunities in newly-entered and under developed markets.<br />

Key Players<br />

Danny Wegman- CEO<br />

Colleen Wegman- President<br />

Stengths<br />

Strong local brand and loyal shoppers<br />

People: empowered, well-trained staff<br />

Excellent customer service<br />

EDLP pricing strategy<br />

Operating margin ~7.5%<br />

Technology: supply chain, Web<br />

High volume per store: sales per square foot 50%<br />

higher than industry average<br />

Emphasis on innovation<br />

Opportunities<br />

Roll out new ideas and test results to other stores<br />

Expand culinary education program<br />

Enhance wine and beer offering, educate<br />

shoppers about wine and food pairings<br />

Data-driven shopper insight strategy<br />

Weaknesses<br />

Stores not efficient to shop- huge footprint, hard<br />

to get in and out quickly<br />

Slow overall navigation<br />

Marginalized center store categories<br />

High prices on prepared gourmet foods<br />

Threats<br />

Number of SKUs<br />

Price competition from Walmart<br />

High-end prepared food competition from Whole<br />

Foods<br />

Macroeconomic uncertainty: EDLP relies on price<br />

stability

Wegmans<br />

Sales & Store Forecasts<br />

Wakefern Sales (in USD millions) by Banner<br />

Banner 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

07 - '12E 12E - '17E<br />

CAGR CAGR<br />

PriceRite $ 1,230 $ 1,326 $ 1,407 $ 1,507 $ 1,604 $ 1,714 16.5% 6.9%<br />

ShopRite $12,370 $13,121 $13,842 $14,542 $15,200 $15,883 5.9% 5.1%<br />

shoprite.com $ 56 $ 80 $ 108 $ 140 $ 175 $ 216 36.7% 30.8%<br />

TOTAL $13,656 $14,527 $15,357 $16,189 $16,979 $17,813 6.70% 5.46%<br />

Wakefern Stores by Banner<br />

Banner<br />

07 - '12E 12E - '17E<br />

2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

CAGR CAGR<br />

PriceRite 48 51 53 56 58 61 9.9% 4.9%<br />

ShopRite 252 256 261 267 271 275 3.9% 1.8%<br />

TOTAL 300 307 314 323 329 336 4.7% 2.3%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Shopped <strong>Retail</strong>er in the Past 4<br />

Weeks<br />

Wegmans<br />

Total 1,620<br />

Wegmans 100%<br />

Walmart 66%<br />

Amazon.com 57%<br />

Target 56%<br />

CVS/pharmacy 46%<br />

Rite Aid 32%<br />

Dollar Tree 32%<br />

Ahold 31%<br />

Walgreens 29%<br />

ALDI 24%<br />

Dollar General 24%<br />

BJ's Wholesale Club 24%<br />

Kmart/Big Kmart 22%<br />

Sam's Club 20%<br />

Costco 18%<br />

ShopRite 18%<br />

Family Dollar 18%<br />

Trader Joe's 17%<br />

7-Eleven 16%<br />

Big Lots 15%<br />

Whole Foods Market 13%<br />

Safeway 11%<br />

Delhaize 8%<br />

Save-A-Lot 7%<br />

Supervalu 7%<br />

Shell 6%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® October 2011 - December 2012

Participating Discount <strong>Retail</strong>ers

Dollar General<br />

Key Initiatives<br />

Category management<br />

Phase 5 expansion<br />

Cooler additions<br />

Tobacco<br />

Key Players<br />

Richard W. Dreiling- Chief Executive Officer and<br />

Chairman of the Board<br />

David M. Tehle- Executive Vice President and<br />

Chief Financial Officer<br />

John W. Flanigan- Executive Vice President,<br />

Global Supply Chain<br />

Susan S. Lanigan- Executive Vice President,<br />

General Counsel<br />

Bob Ravener- Executive Vice President and Chief<br />

People Officer<br />

Gregory A. Sparks- Executive Vice President,<br />

Store Operations<br />

Todd Vasos- Executive Vice President, Division<br />

President and Chief Merchandising Officer<br />

Stengths<br />

Clear and easy to understand value proposition<br />

Consistent traffic and basket growth via strategic<br />

focus on consumables (particularly edible<br />

grocery)<br />

Assortment concentrated on high velocity, need<br />

based items<br />

Solution selling<br />

Low capital investment required for store base<br />

expansion<br />

E-commerce and social media platform<br />

Opportunities<br />

Growing attention from middle and higher income<br />

shoppers<br />

Grocery-centric DG Market format has potential<br />

to make DG a primary outlet for shoppers<br />

Expansion into new markets<br />

Private label getting increasingly sophisticated<br />

Beer & wine<br />

Private label expansion<br />

Zone pricing<br />

Out-of-stock reduction<br />

Weaknesses<br />

Rapid expansion puts pressure on supply chain<br />

Needs to build out capabilities around perishables<br />

distribution<br />

Lean in store labor model makes execution of<br />

programs a challenge<br />

Still viewed as “emerging” by many suppliers<br />

coupled with low levels of resource investment<br />

Threats<br />

Family Dollar is starting to gain speed as a real<br />

alternative<br />

Increased competition from Walmart via its<br />

Neighborhood Market format<br />

Growing inventory levels could disrupt supply<br />

chain<br />

Senior management’s contracts up for renewal<br />

soon

Dollar General<br />

Sales & Store Forecasts<br />

Dollar General Sales (USD millions) by Banner<br />

Banner 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

07 - '12E 12E - '17E<br />

CAGR CAGR<br />

Dollar General $15,858 $17,277 $18,657 $20,033 $21,421 $22,849 11.2% 7.6%<br />

Dollar General Market $ 450 $ 659 $ 938 $ 1,257 $ 1,612 $ 2,005 21.7% 34.8%<br />

Dollar General Plus $ 168 $ 311 $ 497 $ 643 $ 813 $ 1,009 N/A 43.2%<br />

dollargeneral.com $ 90 $ 162 $ 235 $ 317 $ 396 $ 456 N/A 38.3%<br />

TOTAL $16,565 $18,408 $20,327 $22,250 $24,244 $26,319 11.8% 9.7%<br />

Dollar General Stores by Banner<br />

Banner<br />

07 - '12E 12E - '17E<br />

2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

CAGR CAGR<br />

Dollar General 10,283 10,683 11,003 11,288 11,563 11,828 4.8% 2.8%<br />

Dollar General Market 109 159 214 274 339 409 13.8% 30.3%<br />

Dollar General Plus 125 165 210 260 315 375 N/A 24.6%<br />

TOTAL 10,517 11,007 11,427 11,822 12,217 12,612 5.1% 3.7%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Small Format Value Dollar<br />

All Shoppers <strong>Retail</strong>ers General<br />

12,069 4,328 1,812<br />

<strong>Annual</strong> Household Income<br />

Family Dollar<br />

Key Initiatives<br />

Family Dollar defines its growth strategy around the following elements:<br />

Build customer loyalty and experience:<br />

Implementing a comprehensive store remodel program, a modified item assortment, and improved talent<br />

management<br />

Develop diverse, high-performing teams:<br />

Productivity improvement, new labor management tools, and enhanced training programs<br />

Deliver profitable sales growth:<br />

New stores in existing markets as well as entering new markets such as California; growing private label<br />

penetration<br />

Drive continuous improvement:<br />

Investing in new merchandising practices, core store processes, price optimization capabilities, shopper<br />

insights, and category management<br />

Key Players<br />

Howard R. Levine- Chairman of the Board CEO<br />

Michael K. Bloom- President and COO<br />

Paul G. White- EVP – Chief Merchandising Officer<br />

Mary A. Winston- EVP – Chief Financial Officer<br />

Charles S. Gibson, Jr.- EVP – Supply Chain<br />

Stengths<br />

Clear and easy to understand value proposition<br />

Consistent traffic and basket growth via strategic<br />

focus on consumables (particularly in HBA)<br />

Assortment concentrated on high velocity, need<br />

based items<br />

Strong perishables distribution network via<br />

McLane partnership<br />

Newly invigorated corporate culture via<br />

enthusiastic senior management<br />

Opportunities<br />

Growing attention from middle and higher income<br />

shoppers<br />

Expansion into new markets<br />

Private label getting increasingly sophisticated<br />

E-commerce platform<br />

Continued growth of expertise around seasonal<br />

selling<br />

Barry Sullivan- EVP – Store Operations<br />

Kevin Boyanowski - SVP - Global Sourcing<br />

Bryan P. Causey- SVP – Logistics<br />

Tammy L. DeBoer- SVP- Food<br />

Holly Shaskey-Platek- SVP– Merchandising<br />

John J. Scanlon- SVP - Hardlines<br />

Weaknesses<br />

Rapid expansion pressures supply chain<br />

Lean in store labor model makes execution of<br />

programs a challenge<br />

Still viewed as “emerging” by many suppliers<br />

coupled with low levels of resource investment<br />

Consumables growth is dilutive to gross margin<br />

Lack of format diversity<br />

Threats<br />

Dollar General remains the channel leader<br />

Increased competition from other small box<br />

retailers<br />

Increased competition from Walmart via its<br />

Neighborhood Market format<br />

Growing inventory levels could disrupt supply<br />

chain<br />

More sophisticated digital marketing efforts from<br />

others

Family Dollar<br />

Sales & Store Forecasts<br />

Family Dollar Sales (USD Billion) by Banner<br />

Banner 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Family Dollar $ 9.3 $ 10.4 $ 11.6 $ 13.0 $ 14.4 $ 16.0 6.4% 11.4%<br />

Family Dollar Stores by Banner<br />

Banner 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

07 - '12E<br />

CAGR<br />

12E - '17E<br />

CAGR<br />

Family Dollar 7,442 7,852 8,267 8,685 9,093 9,504 3.0% 5.0%<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Age<br />

Q3 2012 Shopper<br />

Profile<br />

All Primary<br />

Household<br />

Shoppers<br />

Monthly Family<br />

Dollar<br />

Shoppers<br />

18–24 5% 5%<br />

25–34 17% 21%<br />

35–44 18% 19%<br />

45–54 21% 24%<br />

55–64 18% 16%<br />

65+ 20% 15%<br />

Household Income<br />

Participating Mass <strong>Retail</strong>ers

Target<br />

Key Initiatives<br />

PFresh<br />

5% Rewards<br />

Target Canada<br />

CityTarget<br />

Multichannel + mobile<br />

Stengths<br />

Strong brand & reputation for innovation<br />

Market positioning leader<br />

Strong popular exclusive/PL brands<br />

Good real estate<br />

Loyal core consumer with higher disposable<br />

income vs. competitors<br />

Clean stores, wide aisles, very shopable<br />

Strongly coordinated social media campaign<br />

capabilities<br />

Excellent reputation for charitable giving<br />

Opportunities<br />

CityTarget format as the base for next wave of US<br />

expansion in urban areas<br />

Target Canada begins international expansion,<br />

possibility other countries later<br />

New segmentation processes & tools to optimize<br />

assortment<br />

Improving shopper visit frequency via food, then<br />

pick up discretionary purchases<br />

Capturing Millennial shoppers via mobile tools,<br />

social media, & other digital vehicles<br />

Developing greater multichannel integration<br />

Key Players<br />

Gregg Steinhafel- President & CEO<br />

John Mulligan- EVP & CFO<br />

Kathee Tesija- EVP Merchandising & Supply Chain<br />

Tony Fisher- President, Target Canada<br />

Jeff Jones- EVP & CMO<br />

Weaknesses<br />

Very narrow margin of error, small deviations<br />

become expensive<br />

Planning calendar can limit ability to make last<br />

minute changes<br />

Margin implications of growing food share, price<br />

comping, & 5% Rewards<br />

OOS more problematic with lean inventory<br />

management<br />

Multichannel integration is still very limited; no<br />

site-to-store yet<br />

Shopper penetration continues to trend<br />

downward, signaling a shrinking base<br />

Threats<br />

Management transitions may lead to uncertainty<br />

on strategic continuity<br />

Markdown risks with rotational goods,<br />

particularly if the trend is “missed“<br />

Focus on “best” guests narrows base and<br />

increases exposure to economic effects<br />

Increasingly tight inventory potentially restrict<br />

sales and limit flexibility<br />

OOS may frustrate shoppers who may dismiss<br />

PFresh’s fill-in value proposition<br />

Competitors are further along ideveloping siteto-store<br />

and e-commerce solutions

Target<br />

Sales & Store Forecasts<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Walmart/Walmart Supercenter<br />

Amazon.com<br />

Walgreens<br />

CVS/pharmacy<br />

Kohl's<br />

Trader Joe's/ALDI<br />

Costco<br />

Kroger¹<br />

Dollar Tree<br />

The Home Depot<br />

Safeway²<br />

Sam's Club<br />

Lowe's<br />

eBay.com<br />

Macy's<br />

JCPenney<br />

Dollar General<br />

Rite Aid<br />

SuperValu³<br />

Barnes & Noble<br />

Bed Bath & Beyond<br />

7-Eleven<br />

Best Buy<br />

TJMaxx<br />

Kmart/Big Kmart<br />

Top 25 Monthly Cross-Shopped <strong>Retail</strong>ers<br />

23%<br />

22%<br />

22%<br />

21%<br />

20%<br />

17%<br />

16%<br />

16%<br />

15%<br />

13%<br />

12%<br />

12%<br />

12%<br />

11%<br />

11%<br />

10%<br />

10%<br />

9%<br />

9%<br />

9%<br />

9%<br />

39%<br />

32%<br />

30%<br />

50%<br />

0% 10% 20% 30% 40% 50% 60%

Walmart<br />

Key Initiatives<br />

Execute Merchandising Strategy. drive productivity loop, redefine seamless access, market share-driven real<br />

estate strategy<br />

Net/net: Reinforcing the core, while advancing new growth opportunities (i.e., multi-channel, smaller box)<br />

Key Players<br />

Mike Duke - CEO, Walmart, Inc.<br />

Charles M. Holley - CFO, Walmart, Inc.<br />

Doug McMillon - CEO , Walmart International<br />

William Simon - Chief Executive, Walmart US<br />

Duncan Mac Naughton - Chief Merchandising Officer, Walmart US<br />

Stephen Quinn - Chief Marketer, Walmart US<br />

Gisel Ruiz -Chief Operator, Walmart US<br />

Cindy Davis - EVP of Global Consumer Insights<br />

Neil Ashe - President and CEO, Global eCommerce<br />

Stengths<br />

Scale and cash flow<br />

International format portfolio and expertise<br />

Relatively high shopping trip frequency<br />

Market development and logistics model<br />

Information technology<br />

Systematic localization<br />

Organization model: measurement, rule-based,<br />

collaboration with lead suppliers, and succession<br />

management and knowledge transfer<br />

Experienced management<br />

Insights capabilities<br />

Opportunities<br />

Development of the Walmart brand, penetration<br />

of higher-income shoppers<br />

Increased international growth<br />

Neighborhood Market/ small box expansion<br />

Utilizing global format expertise across<br />

Sustainability initiatives and influence<br />

Health care services, initiative expansions<br />

Expanding credibility with consumers to sell in<br />

more categories, and building cross-category<br />

shopping<br />

Walmart.com and site-to-store integration<br />

Develop multi-channel platforms<br />

Serving fill-in, quick trips<br />

Weaknesses<br />

Historical over-reliance on new stores<br />

Long-term decline in general merchandise<br />

category sales<br />

Over-reliance on the Supercenter’s one-stop,<br />

stock-up proposition, limits the retailer’s ability to<br />

serve other trip types effectively<br />

Vulnerability to negative publicity<br />

Inconsistent store experience<br />

Perception of its “fresh” grocery offering<br />

sometimes lags<br />

Asset-intensiveness of international operations<br />

Threats<br />

Smarter competition on many fronts<br />

Expanding competitors, including dollar, Aldi<br />

Pressure on loyalists from economic uncertainty,<br />

and volatile gas prices and interest rates<br />

Negative publicity and litigation / regulation<br />

Sourcing, developing, and retaining people<br />

Loss of favor as the assortment and store<br />

experiences shift back-and-forth<br />

Lack of alignment between online and in-store<br />

management, operations<br />

Loss of perceived price leadership<br />

Over-filling its mid- and high-share markets with<br />

Supercenters, unnecessarily cannibalizing sales

Walmart<br />

Sales & Store Forecasts<br />

Walmart US <strong>Retail</strong> Sales<br />

Continent\Country <strong>Retail</strong>er Banner<br />

Walmart US Store Count<br />

2007 2012E 2017E<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

(2007 -<br />

2012E)<br />

North America\Puerto Rico Walmart Amigo $0.60 $0.61 $0.62 0.5% 0.2%<br />

North America\Puerto Rico Walmart Walmart $0.42 $0.35 $0.37 -3.7% 0.8%<br />

North America\Puerto Rico Walmart Walmart Supercenter $0.50 $0.96 $1.36 14.0% 7.1%<br />

North America\USA Walmart Walmart Small Format n/a $0.10 $0.76 n/a 50.7%<br />

North America\USA Walmart Neighborhood Market $2.81 $4.74 $14.52 11.0% 25.1%<br />

North America\USA Walmart Supermercado de Walmart n/a $0.04 $0.04 n/a 1.1%<br />

(2012E-<br />

2017E)<br />

North America\USA Walmart Walmart $46.72 $25.82 $12.31 -11.2% -13.8%<br />

North America\USA Walmart Walmart Supercenter $187.84 $235.62 $277.54 4.6% 3.3%<br />

North America\USA Walmart walmart.com $2.16 $5.14 $9.92 18.9% 14.1%<br />

¹ Walmart Small Format Includes Marketside, Express, and On Campus<br />

Continent\Country <strong>Retail</strong>er Banner<br />

Sales (USD Billions) CAGR<br />

2007 2012E 2017E<br />

(2007 -<br />

2012E)<br />

North America\Puerto Rico Walmart Amigo 31 26 25 -3.5% -0.8%<br />

North America\Puerto Rico Walmart Walmart 8 6 5 -5.6% -3.6%<br />

North America\Puerto Rico Walmart Walmart Supercenter 6 10 12 10.8% 3.7%<br />

North America\USA Walmart Walmart Small Format¹ - 15 98 n/a 45.6%<br />

North America\USA Walmart Neighborhood Market 132 247 687 13.4% 22.7%<br />

North America\USA Walmart Supermercado de Walmart - 2 2 n/a 0.0%<br />

(2012E-<br />

2017E)<br />

North America\USA Walmart Walmart 971 545 254 -10.9% -14.2%<br />

North America\USA Walmart Walmart Supercenter 2,447 3,145 3,698 5.1% 3.3%<br />

¹ Walmart Small Format Includes Marketside, Express, and On Campus<br />

Stores<br />

CAGR<br />

Top 25 <strong>Retail</strong>ers Cross-Shopped by Walmart Shoppers<br />

(past four-week shoppers)<br />

1 Amazon.com 48%<br />

2 Target/SuperTarget 42%<br />

3 Walgreens 39%<br />

4 Dollar Tree 33%<br />

5 CVS/pharmacy 32%<br />

6 Kohl's 31%<br />

7 Lowe's 31%<br />

8 The Home Depot 31%<br />

9 Dollar General 30%<br />

10 JCPenney 30%<br />

11 Kroger (all banners) 1<br />

24%<br />

12 Best Buy 23%<br />

13 eBay.com 23%<br />

14 Sam's Club 22%<br />

15 Family Dollar 22%<br />

16 Macy's 20%<br />

17 Kmart/Big Kmart 20%<br />

18 Barnes & Noble 19%<br />

19 Bed Bath & Beyond 18%<br />

20 Staples 18%<br />

21 Sears 18%<br />

22 Michaels 17%<br />

23 PetSmart 17%<br />

24 Big Lots 16%<br />

25 Costco 15%<br />

1 Includes Dillon's, King Soopers, Kroger, QFC, Ralph's, and Smith's banners<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape®, January-December 2012

Participating Club <strong>Retail</strong>ers

BJ’s Wholesale<br />

Key Initiatives<br />

Competing more effectively with supermarkets through a more cost-effective, local and unique offer<br />

Better understanding and articulating BJ’s brand, while maintaining a box that is predominantly a house of<br />

brands<br />

Improving membership acquisition and retention through an enhanced club experience and offer<br />

Key Players<br />

Laura Sen- President and CEO<br />

Robert Eddy- EVP and CFO<br />

Cornel Catuna- EVP, Club Operations<br />

Christina Neppl- EVP, Merchandising and Logistics<br />

Stengths<br />

Consumables-driven traffic and share<br />

Strong regional presence across East Coast,<br />

notably in New England<br />

Consumer focus as channel differentiator<br />

Lack of discount grocers in its markets<br />

Strong promotional activity supports increased<br />

awareness<br />

Opportunities<br />

Talent development<br />

Increasing leverage of membership margin<br />

Optimizing private label portfolio<br />

Online site growth, social media penetration<br />

Increased capital and scale via privatization<br />

Improved financial flexibility supports moderate<br />

expansion, investment<br />

Vendor partnering/insights, willingness to test<br />

Weaknesses<br />

Low sales/club compared to Sam’s, Costco<br />

Reliance on consumable SKUs<br />

Value proposition and club experience less<br />

dynamic, defensible<br />

Lack of discipline – deviation from club model<br />

Private label with less equity than competitors<br />

Real estate: Footprint challenges efficiencies<br />

Threats<br />

Member retention, first year and long-term<br />

US economy - Concentration of buildings in tough<br />

housing markets<br />

Extra SKUs, credit, and coupon costs<br />

Competition from local grocers, clubs<br />

Balancing financial model with strategies<br />

Lack of capital, scale relative to competitors<br />

Reliance upon merchandise margin

BJ’s Wholesale<br />

Sales & Store Forecasts<br />

Banner Sales (USD, Billions)*<br />

2011 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

BJs<br />

11.7 12.4 13.0 13.7 14.4 15.2 16.0<br />

bjs.com<br />

0.1 0.1 0.1 0.1 0.2 0.2 0.2<br />

*US only, includes membership fee income<br />

Banner<br />

Number of Stores<br />

2011 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

BJs 195 200 205 209 214 219 223<br />

bjs.com 0 0 0 0 0 0 0<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Top <strong>Retail</strong>ers Shopped During Past 4 Weeks,<br />

Among Past 4-Week BJ's Shoppers<br />

2012 Index<br />

Sample size 2822<br />

Walmart / Walmart<br />

Supercenter 66% 93<br />

Target / SuperTarget 53% 90<br />

CVS/pharmacy 56% 109<br />

The Home Depot 48% 98<br />

Lowe's 39% 102<br />

Kohl's 43% 112<br />

Walgreens 39% 107<br />

Best Buy 32% 90<br />

JCPenney 32% 96<br />

Staples 35% 105<br />

Macy's 34% 104<br />

Hallmark 34% 105<br />

Amazon.com 56% 174<br />

Bed Bath & Beyond 30% 92<br />

Rite Aid 28% 96<br />

Barnes & Noble 31% 108<br />

Toys "R" Us 24% 93<br />

eBay.com 26% 105<br />

Michaels 25% 105<br />

Stop & Shop 23% 98<br />

Kmart/Big Kmart 25% 106<br />

Dollar Tree 31% 180<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape®, January–<br />

December 2012

Costco<br />

Key Initiatives<br />

International expansion, especially in Asia and Australia and extending to new markets like France<br />

Leveraging health and wellness, to appeal to its aging memberbase as well as its increasingly health<br />

conscious shoppers<br />

Maximizing the club experience to better attract, engage and retain members<br />

Turning more attention to Gen Y, especially ramping up digital strategy to maintain relevance with evolving<br />

member preferences, younger member appeals<br />

Key Players<br />

Craig Jelinek- President and CEO<br />

Richard Galanti- EVP and CFO<br />

James Murphy- EVP, International<br />

Douglas Schutt-EVP, Merchandising<br />

Stengths<br />

Management continuity<br />

Adherence to model<br />

Member loyalty/trust and resilience<br />

Commitment to members/employees<br />

American Express partnership<br />

Resilience across business cycles<br />

Brand equity, experience and private brand<br />

Opportunities<br />

Co- and multi-vendor branding<br />

New markets, including online<br />

Margin enhancement via exclusives<br />

Going green<br />

Business focus<br />

Hispanic, Gen Y and more localized markets<br />

Collaboration on item innovation<br />

Refinement of promotional activity<br />

Weaknesses<br />

Management continuity<br />

Pace of decision-making<br />

Information value chain management<br />

Reliance on word of mouth<br />

Adherence to model<br />

Next generation appeals and relevance<br />

Convenience in the traditional sense<br />

Threats<br />

Exposure to West Coast given concentration<br />

Increasing competition, especially from online<br />

Changing sales mix to more consumables<br />

Vulnerability to gas, FX<br />

Sam’s gaining brand strength<br />

Efficiency management<br />

Growth of Kirkland Signature brand<br />

Memberbase potentially aging out of the box

Costco<br />

Sales & Store Forecasts<br />

Continent\Country<br />

Sales (Billions)*<br />

2011 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

Asia\Japan 3.0 3.9 5.5 6.8 8.1 9.8 11.5<br />

Asia\South Korea 0.6 0.7 0.8 1.0 1.1 1.2 1.4<br />

Asia\Taiwan 1.2 1.4 1.7 1.9 2.3 2.5 3.0<br />

Australasia\Australia 0.3 0.5 0.7 0.8 0.9 1.0 1.1<br />

Europe\France - - - - 0.1 0.1 0.1<br />

Europe\United Kingdom 2.4 2.5 2.6 2.8 3.0 3.1 3.4<br />

North America\Canada 13.9 15.4 16.7 17.5 18.1 19.1 20.3<br />

North America\Mexico 2.5 2.5 2.7 3.0 3.3 3.6 4.0<br />

North America\Puerto Rico 0.7 0.7 0.8 0.8 1.0 1.1 1.2<br />

North America\USA 64.2 71.0 77.2 83.7 90.7 98.0 106.0<br />

*Includes membership fee income<br />

Continent\Country<br />

2011 2012E<br />

Number of Stores<br />

<strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

Asia\Japan 9 13 16 18 19 21 22<br />

Asia\South Korea 7 8 9 10 10 11 12<br />

Asia\Taiwan 8 9 10 10 11 11 12<br />

Australasia\Australia 3 3 4 5 5 6 6<br />

Europe\France - - - - 1 1 1<br />

Europe\United Kingdom 22 22 23 24 25 25 26<br />

North America\Canada 82 82 85 87 90 92 95<br />

North America\Mexico 32 32 33 34 36 37 39<br />

North America\Puerto Rico 4 4 4 4 5 5 5<br />

North America\USA 425 435 446 457 469 479 490<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Top 25 <strong>Retail</strong>ers Shopped during Past Four Weeks by Monthly<br />

Costco Shoppers<br />

Monthly Costco<br />

Shoppers<br />

Total 524<br />

Costco 100%<br />

Amazon.com 59%<br />

Walmart Supercenter 51%<br />

Target GM 50%<br />

The Home Depot 46%<br />

CVS/pharmacy 42%<br />

Kohl's 42%<br />

Walgreens 41%<br />

Macy's 38%<br />

Best Buy 37%<br />

Lowe's 34%<br />

JCPenney 33%<br />

Bed Bath & Beyond 33%<br />

Netflix 32%<br />

Trader Joe's 32%<br />

Dollar Tree 30%<br />

Michaels 29%<br />

Staples 27%<br />

eBay.com 26%<br />

Barnes & Noble 25%<br />

Sears 23%<br />

Safeway 22%<br />

SuperTarget 22%<br />

Hallmark 21%<br />

Toys "R" Us 21%<br />

Apple 21%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape®, November 2012

Sam’s Club<br />

Key Initiatives<br />

Leading in Digital, as the most tech- and digital-savvy of the clubs, Sam’s goal is get and stay ahead of the<br />

pack here<br />

Leveraging health and wellness and services, to appeal to aging and health conscious shoppers while<br />

maximizing its member value proposition<br />

Better engaging members, across platforms and boundaries by increasingly integrating online and mobile<br />

with the box<br />

Maximizing member insights, to better understand , attract, retain and appeal to club shoppers and<br />

prospective members<br />

Key Players<br />

Rosalind Brewer – President and CEO<br />

Charles Redfield, EVP, Merchandising<br />

Todd Harbaugh, EVP, Operations<br />

John Boswell, SVP Marketing, Member Insights, and eCommerce<br />

Michael Dastugue, SVP, CFO<br />

Don Frieson, SVP, Replenishment and Planning<br />

Stengths<br />

Insights and analytics capabilities<br />

Walmart corporate oversight, resources<br />

Digital platforms and capabilities<br />

Fresh leadership talent<br />

Aligned mission, clear go-to-market strategy<br />

Vendor collaboration<br />

Openness to testing and implementing novel<br />

marketing and merchandising approaches<br />

Opportunities<br />

Personalized promotions via Instant Savings<br />

Expanded marketing efforts to build engagement,<br />

especially via new media, H&W<br />

Sustainability as emotional connector and for<br />

added efficiencies<br />

Growing private label penetration<br />

Format innovation to target specific subgroups<br />

“Gen Y” family formation = rising audience<br />

Weaknesses<br />

Low membership renewal, growth rates<br />

Sales per club – asset productivity<br />

SKU productivity performance<br />

Confusion due to historical pendulum swings<br />

between business & individual member focus<br />

Inconsistency of format locations, in-club<br />

presence, and sales volumes across US<br />

Underdeveloped private brand equity<br />

Threats<br />

Price perception versus key club competitors<br />

Competition from other channel retailers, such as<br />

mass and online, esp. Amazon<br />

Significant shopper overlap with Walmart<br />

Channel blurring in club packs with Walmart<br />

Newer senior leaders risk not foreseeing nuanced<br />

challenges to implementing change<br />

Growing private label penetration<br />

Straying too far from the club model

Sam’s Club<br />

Sales & Store Forecasts<br />

Continent\Country<br />

*Includes membership fee income<br />

Sales (USD, Billions)*<br />

2011 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

Asia\China 0.4 0.4 0.5 0.5 0.6 0.6 0.7<br />

North America\Mexico 6.7 6.9 7.5 8.1 8.7 9.3 9.9<br />

North America\Puerto Rico 1.1 1.2 1.2 1.3 1.4 1.5 1.6<br />

North America\USA 52.2 54.9 57.9 61.2 64.8 68.6 72.6<br />

South America\Brazil 1.2 1.2 1.2 1.3 1.3 1.4 1.4<br />

Continent\Country<br />

Number of Stores<br />

2011 2012E <strong>2013</strong>E 2014E 2015E 2016E 2017E<br />

Asia\China 6 7 8 8 9 9 10<br />

North America\Mexico 124 132 140 147 154 161 168<br />

North America\Puerto Rico<br />

11 11 11 12 12 12 13<br />

North America\USA 599 608 620 631 641 650 659<br />

South America\Brazil 27 28 29 30 31 32 33<br />

Merchandising, Marketing. & <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® Data<br />

Strong and<br />

growing<br />

emphasis on<br />

driving value<br />

including and<br />

extending<br />

beyond price<br />

Top 25 <strong>Retail</strong>ers Shopped during Past Four Weeks by Monthly Sam's<br />

Club Shoppers<br />

Monthly Sam's Club<br />

Shoppers<br />

Total 521<br />

Sam's Club 100%<br />

Walmart Supercenter 77%<br />

Amazon.com 53%<br />

Walgreens 44%<br />

The Home Depot 43%<br />

Lowe's 43%<br />

Kohl's 41%<br />

Dollar Tree 37%<br />

Target GM 36%<br />

JCPenney 34%<br />

CVS/pharmacy 33%<br />

Best Buy 31%<br />

Dollar General 31%<br />

Macy's 25%<br />

Kroger/Kroger Marketplace/Kroger Fresh Fare 24%<br />

Bed Bath & Beyond 23%<br />

Big Lots 23%<br />

Staples 23%<br />

eBay.com 22%<br />

Michaels 22%<br />

PetSmart 22%<br />

Netflix 21%<br />

Sears 21%<br />

Barnes & Noble 21%<br />

Kmart/Big Kmart 21%<br />

ALDI 20%<br />

Source: <strong>Kantar</strong> <strong>Retail</strong> ShopperScape®, October 2012

Authors + Contributors<br />

Jessica Campbell / Drug <strong>Retail</strong>ers<br />

Analyst<br />

jessica.campbell@kantarretail.com / 617.912.2874<br />

Mike Pagalia / Supermarket + Value <strong>Retail</strong>ers<br />

Senior Analyst<br />

mike.pagalia@kantarretail.com / 617.912.2855<br />

Alida Destrempe / Supermarket <strong>Retail</strong>ers<br />

Analyst<br />

alida.destrempe@kantarretail.com / 614.355.4030<br />

Sara Al-Tukhaim / Club <strong>Retail</strong>ers<br />

Principal Analyst<br />

sara.altukhaim@kantarretail.com / 617.912.2859<br />

Robin Sherk / Walmart<br />

Director, <strong>Retail</strong> Insights<br />

robin.sherk@kantarretail.com / 212.896.8191<br />

Amy Koo / Target<br />

Senior Analyst<br />

amy.koo@kantarretail.com / 617.912.2872<br />

Rachel McGuire/ Shopper Data<br />

Senior Analyst<br />

rachel.mcguire@kantarretail.com / 614.355.4036<br />

Kate Senzamici/ Shopper Data<br />

Analyst<br />

kate.senzamici@kantarretail.com / 617.912.2866<br />

Bryan Gildenbert<br />

Chief Knowledge Officer<br />

bryan.gildenberg@kantarretail.com / 617.912.2862<br />

<strong>Kantar</strong> <strong>Retail</strong><br />

501 Boylston Street, Suite 6101<br />

Boston, MA 02116<br />

www.kantarretail.com<br />

www.kantarretail<strong>iQ</strong>.com<br />

T 617 912 2828<br />

F 630 245 5647<br />

Sources: <strong>Kantar</strong> <strong>Retail</strong> analysis, KR<strong>iQ</strong>, <strong>Kantar</strong> <strong>Retail</strong> ShopperScape® <strong>NACDS</strong>, company reports + material

logo

products

Resources

Company

Terms of service
Privacy policy
Cookie policy
Cookie settings
Imprint
Change language
Made with love in Switzerland
© 2024 Yumpu.com all rights reserved

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!