Board of Directors & Business Council Partners Meeting

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Garey Stewart
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1 Board of Directors & Business Council Partners Meeting WIC Annual Board Meeting Savannah, GA Save-A-Lot s Consumer Insights Presented by Lisa G. Nicastri January 31,

Smaller Stores (Less overhead, more convenient stores) Power Buying (We pay less, so do our shoppers)

2 What is Save-A-Lot All About?- Stretching Customer Dollars! No Frills (No lobster tanks, just groceries, mostly Exclusive Brand) Easy Assortment (We ve got what you want) Smaller Stores (Less overhead, more convenient stores) Power Buying (We pay less, so do our shoppers) Self-Procurement & Distribution (Efficient and cost-effective) Unique Merchandising (Private label products, Reduced labor, shelving costs) Self-Service (Customers put savings in the bag) 2

3 Save-A-Lot has more than 1,300 locations in 36 states 74% of all locations accept WIC Chart showing SAL number 2 banner 2

4 Product D Save-A-Lot Save-A-Lot focuses on a full array of private label brands, select national brands and fresh produce and fresh meat Save-A-Lot Private Label Brands All categories / most popular flavors and sizes Fresh Produce Select National Brands 4

5 Among major food and value retailers, Save-A-Lot serves shoppers with the lowest income profile $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $59.2 $38.6 $41.3 $46.6 $51.1 $52.4 $52.9 $58.4 $59.7 $67.4 $73.0 $77.1 $77.2 $78.0 $30.0 $20.0 $10.0 $0.0 Source: Kantar Retail ShopperScape, Quarter 1 (January-March 2012) 5

6 Save-A-Lot tends to over-index among shoppers receiving SNAP but under-indexes among shoppers receiving WIC 20% 15% SAL Shoppers US Rate 3% 8% SNAP WIC Sources: SAL Shoppers 2010 Shopper Survey (n=2,056) US rates CNNMoney article 2/17/2012 Government Assistance Expands Tami Luhby 6

WIC transactions at Save-A-Lot are less likely to contain Save-A-Lot private label brands than total Save-A-Lot transactions 2% REDUCED FAT MILK-GALLON 12 CT.

7 WIC transactions at Save-A-Lot are less likely to contain Save-A-Lot private label brands than total Save-A-Lot transactions 2% REDUCED FAT MILK-GALLON 12 CT. GRADE A LARGE EGGS VITAMIN D MILK-GALLON BANANAS 1% LITE MILK-GALLON JUICY JUICE APPLE PANNER CREAMY PEANUT BUTTER COBURN FARMS DELUXE AMERICAN SLICES JUICY JUICE PUNCH TIPTON S GROVE APPLE JUICE CHERRIOS CEREAL ROMAN MEAL SUNGRAIN 100% WHOLE WHEAT BREAD SIMILAC ADVANCE POWDER PEPPERS,GREEN XLG GERBER GOODSTART GNTL FRMULA GINGER EVANS EVAPORATED MILK ENFAMIL PREMIUM POWDER-WIC BEECHNUT 2 BANANAS BEECHNUT 2 APPLESAUCE Note - Items are listed in order based on the number of WIC transactions in which they appeared Source: Save-A-Lot internal data W/E 11/17/12 thru W/E 12/1/12 11

8 Save-A-Lot is the leading edited assortment format focused on low price leadership via our own private label store brands Conventional Supermarkets Smaller <15,000 sq ft Stores 50,000+ sq ft Fewer <2,800 SKUs 35,000+ SKUs SKUs Store >50% of sales Brands <25% of sales 5

9 While National Brands play a key role at retail, Private Label Brands continue to gain market share 20.5% 20.0% 19.5% 19.0% 18.5% 18.0% 17.5% 17.0% 16.5% 16.0% 15.5% Private Label market share of Food/Drug/Mass total sales 19.9% 19.7% 19.4% 18.8% 17.6% 17.0% Source: Mintel Private Label Food, Nov Data: Mintel and IRI Infoscan Reviews ` 6

10 Strong perceptions of private label brand quality and value have increased since 2008 Give the people what they want. (Al Capone) 80% 70% 74% 74% 71% 65% 65% 63% 70% 69% 67% % 50% 40% 37% 38% 33% 30% 20% 20% 18% 17% % saying they Agree/Strongly Agree: 10% 0% Good alternative to name brands Quality as good as name brands Usually extremely good value for the money Some are higher quality than name brand For people on tight budgets & can't afford the best 11% 11% 11% Don't feel comfortable serving to guests Nielsen Report: Private Brands Outlook Flash in the Pan or the Real Deal? 1/12 Data: Nielsen Homescan Panel survey 9

11 SAL s Mission is WIC s Mission: Private Label Brands help stretch WIC budgets further National Brands are still important in fulfilling WIC consumer needs. Lower cost private label brands allow state WIC budgets to reach more of those in need; On average, private label brands are 25-35% less expensive than the equivalent National Brand Item (Nielsen); Private label brands provide the opportunity to stretch WIC budgets further For every $10 million in private label brands bought vs National Brand, WIC budgets could realize a savings of at least $2.5 million. 13

12 Thanks You! Presented by Lisa G. Nicastri

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