1planetretail.net

Strategic Preview: Q3August - October 2013

13 November 2013 STEPHEN SPRINGHAMSenior Retail Analyst

1. Expectations for the Quarter

2. US: Q3 Strategic Changes

3. Global: Q3 Strategic Changes

4. Outlook

5. What’s new at Planet Retail

Strategic Preview: Walmart Q3

3

Walmart under-delivered on its comp guidance in both Q1 and Q2. For Q3, it has given guidance of “around flat” comps, but may again fall short.

1. Expectations for the Quarter1. Expectations for the Quarter

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 (f)

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1.0

2.0

3.0

4.0Walmart US: Like-for-Like Sales by Quarter, 2010-2013 (%)

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Note: Includes Sam’s Club, excludes fuel; f – forecast.Source: Planet Retail.

Actual Like-for-Like SalesProjected Like-for-Like Sales

4

George – new markets for Asda’s clothing brand…

3. Global: Q3 Strategic Changes3. Global: Q3 Strategic Changes

South Africa: First ‘pop-up’ shops, as well as concessions within other Massmart/WMT banners.

In October, three standalone George ‘pop-up’ stores started trading at the Cresta Shopping Center in Johannesburg, Galleria Shopping Mall in Amanzimtoti and Cape Gate Shopping Center in Cape Town. The pop-up stores showcase an edited selection of the George range and will continue operating for up to three months.

Walmart is also introducing the George clothing brand to its South African stores. The company will also stock George baby clothes and George essentials at Game outlets, as well as babywear at Makro from November onwards.

Dubai: First franchised standalone store. In October, George opened its first store in Dubai. The 6,588 sq ft

store is located in the Al Ghurair shopping mall. It was developed in partnership with Azadea Group, which is helping Asda’s own label fashion brand’s expansion in the UAE.

By the end of October, George had opened eight stores across the Middle East and UAE over the course of a year. A ninth has since opened in Malta.

Walmart already sells Asda’s George brand across its various banners in the US, Canada, Mexico, Argentina, China and Japan. In Europe, where WMT has a limited store footprint, it services orders through George.com.

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Walmart: US New Floor Space versus Existing Floor Space of Select Other Global Operators (Sq ft)

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Source: Planet Retail

US Expansion: WMT plans to add 19-21 million sq ft of new space to its US business in 2014 (fiscal 2015). One years’ space for WMT is more than many other operators entire existing floor space.

4. Outlook4. Outlook

Walmart will establish nearly as much new space in the US next year as Sainsbury’s (the second-largest player in the UK) has established in its 144-year history.