SWEDISH FOOD RETAILERS FEDERATION MEMBERS OF SWEDISH FOOD

SWEDISH FOOD RETAILERS’ FEDERATION

MEMBERS OF SWEDISH FOOD RETAILERS’ FEDERATION 5

Companies run by Swedish Food Retailers’ Federation 4

The Grocery trade in Sweden HUI Research på uppdrag av Svensk Dagligvaruhandel September 2016 © HUI Research 2016

The food chain – from farm to fork Restaurants, cafes increasing share Consumers Food retailers Food industry Farmers © HUI Research 2016

The food industry – important for Sweden (turnover) The grocery trade accounts the biggest turnover in the food chain 600 000 541 435 500 000 Omsättning (mnkr) 400 000 300 000 174 590 200 000 129 366 100 000 89 102 0 Jordbruk Livsmedelstillverkare Dagligvaruhandeln & partihandel med livsmedel Hotell & restaurang Source: Net sales 2014, from Business Economics (SCB). The grocery trade refers to SNI 47. 11 + 47. 2. Wholesale of food refers to SNI 46. 3 (Wholesale of food, beverages and tobacco). Food manufacturers refer to SNI 10 -12 (Food, beverage and tobacco production). © HUI Research 2016

The food industry – important for Sweden (employees) Young (16 -24 år) Alla branscher Jordbruk Livsmedelstillverkare Hotell & restaurang Dagligvaru- & partihandel med livsmedel 10, 1% 8, 4% 14, 4% 39, 5% 26, 7% 180 000 159 911 160 000 Antal personer 140 000 128 963 120 000 112 733 100 000 94 558 80 000 60 000 40 000 20 000 57 090 54 948 52 316 47 022 7 926 0 Jordbruk Livsmedelstillverkare Unga förvärvsarbetande, 16 -24 år 34 405 Dagligvaruhandeln & partihandel med livsmedel 47 178 Hotell & restaurang Förvärvsarbetande, 25+ år Source: RAMS (refers to employment, night population, 2014). The grocery trade includes SNI 47. 11 and 47. 2. Wholesale trade in food refers to SNI 463 (Wholesale of food, beverages and tobacco). Food manufacturers refer to SNI 10 -12 (Food, beverage and tobacco production). © HUI Research 2016

Spread over the contry Number of stores (devided by turnover) 55. 1 million and upward The map shows the distribution of grocery stores across Sweden. A dot on the map corresponds to a store. Källa: Delfi, 2015 © HUI Research 2016 1070 0 -5, 5 mill. SEK 916 428 1182 22, 6 -55, 0 million SEK 447 5, 6 -12, 5 mill. SEK 12, 6 -22, 5 mill. SEK

Number of stores decreases 6000 5356 5140 4834 5000 4812 4757 4631 4516 4430 4353 4275 4331 3980 4000 3861 3842 3837 3828 2012 2013 2014 2015 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Källa: Nielsen, number of stores in grocery trade. OBS! Time series breach between 2010 and 2011 when 325 stores included in the Axfood Group were excluded from being defined as Retail Trade. © HUI Research 2016

Consumer prices increase less than disposable income Disposable income increase by 50 percent since 2005. During the same period prices of meat, egg, veg and dairy have increased by 20 -30 percent. 160 150 140 Index 2005=100 130 120 110 100 90 2005 2006 2007 Vegetabilier 2008 2009 2010 Mejeriprodukter 2011 Ägg 2012 2013 Kött 2014 Disponibel inkomst Källa: Jordbruksverkets statistikdatabas, index 2005=100. SCB NR, sektorräkenskaper, löpande priser, HUI beräkning. © HUI Research 2016

Meat, Dairy, Fruit and veg largest categories Other; [VÄRDE] Meat; [VÄRDE] Water, softdrink and juice ; [VÄRDE] Sweets and icecream; [VÄRDE] Bread and grains; [VÄRDE] Källa: SCB, 2014. © HUI Research 2016 Dairy, egg; [VÄRDE] Fruit and vet [KATEGORINA MN]; [VÄRDE]

Trends and consumer behavior 1. 2. 3. 4. 5. Growing health interest among consumers - Interest in vegetarian food as well as other health products increases. Organic Products continue to increase significantly. Private Label products are taking more and more market shares in all segments. The grocery trade increases sharply online and is expected to continue upwards. Consumers spend more and more share of income at the café’s and restaurants © HUI Research 2016

Vegetarian food increasing 160 150 140 Index 2010=100 130 120 110 100 2011 2012 2013 2014 2015 Source: Nielsen Scantrack, Market Review of DVH. As vegetarian food, here are frozen and fresh vegetarian foods, as well as dried peas / beans / lentils and preserved peas / beans. © HUI Research 2016

Organic food increasing 10, 0% Share of total food sales 8, 0% 6, 0% 3, 6% 4, 0% 2, 4% 4, 0% 4, 1% 4, 2% 3, 9% 4, 3% 2, 8% 2, 3% 0, 0% 04 20 Källa: SCB, 2014. © HUI Research 2016 05 20 06 20 20 07 08 20 09 20 10 20 11 20 12 20 13 20 14 20

Organic largest share within fish and fruit • Fish, fruit, vegetables and coffee, tea and cocoa have the largest share of organic All categories have increased their share of organic, fish (including MSC) and fruit has grown the most • 14% 13% 12% 10% 10% 9% 8% 8% 6% 6% 6% 4% 4% 2% 3% 3% 2% 2% 2% 3% 2% 2% 1% 2% 0 % 0% 0% 2% 2% © HUI Research 2016 2004 2014 lä tte n, va al er LT TA TO ui , j sk h oc e ffe , t Ka M in Källa: SCB, 2014. ce o ka ka ed e sm liv a ig vr ts Sö Ö ak er G oc rö h ns gl a ak l ss er t uk Fr ljo O M jö lk , o st ro ch oc h fe tte r äg g sk Fi tt Kö Br öd oc h sp an n m ål 0%

Private Label share increasing Percentage of EMV International (2014) Share of EMV on total food sales in Sweden (2014) 30, 0% 22, 9% 20, 0% 16, 4% 10, 0% 9, 1% 10, 0% 10, 3% 10, 7% 17, 1% 11, 5% 12, 0% 11, 3% Switzerland 45% United Kingdom 41% Germany 34% France 28% Denmark 25% Sweden 23% Finland 22% Norway 21% Italy 17% Russia 6% 7, 0% 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 Source: Statistics Sweden, 2014. Nielsen, 2014. International shares are based on the sum of mean values from all categories, hence some difference to the figures presented in the chart. © HUI Research 2016

Private label share within various categories 45% 42% 38% 40% 35% 32% 35% 30% 23% 25% [VÄRDE] 19% 20% 15% 14% 15% 10% 9% 14% 11% 8% 6% 6% 5% 12% 10% 8% 11% 7% 6% [VÄRDE] 2% © HUI Research 2016 te at lv ra in e M LT TA ju k, äs n, l e ffe , t Ka TO ic e o ka oc liv a ig vr Ö h sm h oc er ak 2014 ka ed el s gl ak ns Sö ts O 2004 Källa: SCB, 2014. as er t uk rö ch ro ljo G fe h oc st , o lk M jö Fr tte r g äg sk Fi tt Kö Br öd oc h sp an n m ål 0%

Grocey on line increasing Online grocery sales online 2009 -2016 Regular on line vs ready made dinner solutions 60% 2016* 57% 5, 7 2015 2014 47% 43% 3, 0 2013 47% 50% 4, 1 53% 40% 2, 1 30% 2012 1, 6 2011 20% 1, 3 2010 0, 8 2009 10% *Prognos 0, 6 0% 0 0, 5 1 1, 5 2 2, 5 3 3, 5 Miljarder kronor Källa: HUI/Svensk Digital Handel 2016 © HUI Research 2016 4 4, 5 5 5, 5 6 2013 2014 Middagslösningar 2015 Lösplock

Changing consumption Share of house hold expenditure Bostad, elektricitet, gas och uppvärmning Transporter [VÄRDE] 3, 5% [VÄRDE] 0, 3% [VÄRDE] 5, 3% Fritid, underhållning och kultur 6, 1% [VÄRDE] Livsmedelskonsumtion 25, 8% [VÄRDE] Restaurangkonsumtion Livsmedel och alkoholfria drycker Övriga varor och tjänster 4, 8% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 16, 0% 14, 0% 12, 0% 10, 0% 8, 0% 6, 0% 4, 0% 2, 0% 0, 0% Hotell, kaféer och restaurang Möbler, hushållsartiklar och rutinunderhåll 11, 1% Beklädnadsartiklar 11, 1% 12, 7% Alkoholhaltiga drycker och tobak Hälso- och sjukvård 12, 6% Kommunikation Utbildning Källa: Andel av hushållens konsumtion efter ändamål (exklusive utlandsnettot), löpande priser, 2015, från NR (SCB). © HUI Research 2016

KPI’s © HUI Research 2016

Margins in grocery trade low Gross margin % av omsättning 50 45 40 35 30 25 20 15 10 5 0 44 43 42 40 39 35 30 Kläder Total detaljhandel Möbler Sport & fritid Elektronik Järn, bygg & VVS 2, 1 2 Dagligvaror Net margin 3, 5 3, 1 3 2, 6 2, 5 % av omsättning 2, 4 2, 2 2 1, 6 1, 5 1 0, 5 0 Järn-, bygg och VVS Elektronik Källa: SCB, 2014. Siffrorna avser medianer under 2014. © HUI Research 2016 Möbler Sport & fritid Total detaljhandel Dagligvaror Kläder

High turnover foundation for profit Gross profit per employee 2500 2030 2000 tkr 1745 1658 1582 1487 1500 1304 1278 Total detaljhandel Kläder 1000 500 0 Dagligvaror Järn, bygg & VVS Källa: SCB, 2014. Siffrorna avser medianer under 2014. © HUI Research 2016 Möbler Sport & fritid Elektronik