It’s not so simple as trading downto the dollar channel.

NEW REPORT FROM WSL /STRATEGIC RETAIL

CURRENT DATA + TRENDED + ACTIONABLE + PREDICTIVE

WHERE DID

SHOPPER GO?

whether Walmart is your biggest customer or biggest competitor

you need to understand

and what does a

post Walmart world look like for you

M Y T H 2The core Walmart shopper drives the company’s sales.

Unlikely. The core Walmart shopper can’t pull Walmart out of this hole. They are

less than half of all its shoppers, and they don’t have enough money to

spend to reverse the decline.

This report debunks several myths surrounding the decline in Walmart’s US sales, and gives you an action plan for a post-Walmart world.

M Y T H 1Recession or Not, I’m

going to Shop.Walmart’s core shopper

is gone. Not so. The core Walmart shopper is still there,

going even more often, and relying on Walmart now more

than ever... but its core shopper is not enough.

THIS HOW AMERICA SHOPS® REPORT

INCLUDES 8 ACTION STEPS FOR YOU IN A POST-WALMART WORLD

CONTACT US 307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM

So now what? Without EDLP, what does Walmart stand for? Is the passion for Walmart over? Is Walmart now just another store?

M Y T H 3Walmart shoppers are now

in Dollar Stores.Don’t blame it all on Dollar

stores. Every channel is doing its part to undo Walmart.

M Y T H 4Walmart stands for EDLP.

Not anymore. Walmart used to own the low price

message, but its competitors shouted “low price” during the recession, and shoppers listened. (Which is why you can’t blame all

Walmart’s woes on Dollar stores.

M Y T H 5The “nicer shopping

experience” has damaged Walmart. Not exactly.

Overall, the improved Walmart shopping experience gets good

reviews from shoppers – at least from the half who noticed.

M Y T H 6Walmart shoppers have

less to spend. Yes, especially its core

shoppers. The more affluent shoppers, who are rarely in Walmart, didn’t find enough

reason to stay.

307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001 T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM

As retail strategists and shopping futurists, we are recognized for our ability to turn shopper insights into smart actionable strategies. Never before has this been so essential. So let us help you navigate this new shopping world.

REPORT / ADD-ON: WORKSHOP / PRESENTATION For more information or to order by credit card, please contact us at info@wslstrategicretail.com or 212.924.7780(Businesses in NY state, please add 8.375% NY sales tax)

Internet survey; conducted April ‘11. Nationwide sample of 1500 adults

METHODOLOGY

HEALTH & BEAUTYHand & Body MoisturizersCosmetics (WOMEN ONLY)Fragrance (perfume, cologne, etc.)Hair care productsMen’s grooming products OTC MedicationSkin care productsLip care (to prevent dry, cracked, etc.)Vitamins/nutritional supplements

BABYBaby personal care (lotions, soaps, etc.)

CLOTHING & FASHION Active WearClothingFashion accessoriesShoes (casual, dressy, sandals)Sleepwear/ Loungewear/ Lingerie

HOMEHome décor (pillows, bedding, etc.)Home fragrance/candles

FOOD, BEVERAGE and GROCERYBottled waterBreakfast cerealCandyCarbonated beverages/ sodaCoffee (instant or ground)Dairy/milk/eggsIce cream/yogurtLaundry household cleaners/ paper goodsOrganic/Natural foodsPet suppliesSalty snacks (chips, pretzels)Tea

HOW AMERICA SHOPS® WHERE DID THE GO?

» Total » Men and Women » Income: under $25K, $25-$49K, $50K-$99K, $100K+ » Age: 18-34, 35-54, 55+

ANALYZED BY

» Frequent Shopper » Occasional Shopper » Rare Shopper

WALMART SHOPPER CELLS

PRODUCT CATEGORIES

PRICING

IN THIS REPORT5 . . . BACKGROUND & OBJECTIVES

6 . . . METHODOLOGY

8 . . . HOW TO READ THIS REPORT

9 . . . EXECUTIVE SUMMARY

25 . . . DETAILED FINDINGS

25 . . . Chapter 1: Where Did the Walmart Shopper Go?

29 . . . Chapter 2: The Walmart Shopper: Who Stayed, Who Left

35 . . . Chapter 3: Going Less, Spending Less, and Why

47 . . . Chapter 4: Where is the Walmart Shopper Going?

51 . . . Chapter 5: Walmart Shoppers in Dollar Stores

59 . . . Chapter 6: The Image Challenge to Walmart

65 . . . Chapter 7: The Impact of Walmart Store Changes

75 . . . Chapter 8: Choosing Walmart - Category by Category

81 . . . Chapter 9: The Economic (And Gas Pinch) Outlook for Walmart Shoppers

87 . . . APPENDIX

HOW AMERICA SHOPS® Where did the Walmart Shopper Go?© WSL STRATEGIC RETAIL 201152

WALMART SHOPPERS SHOPPING DOLLAR STORES

A majority of Walmart shoppers (59%) shopped Dollar Stores in the past 3 months.

59%41%

WALMART/DOLLAR SHOPPER

WALMART/NOT DOLLAR

SHOPPER

PROPORTION OF WALMART SHOPPERS SHOPPING DOLLAR STORE

(PAST 3 MONTH SHOPPERS)

74% of Walmart shoppers are in Dollar Stores at least once a month. 49% are there several times a month. That’s a lot of cross-shopping, and shows how important the Dollar channel is to Walmart shoppers.

Frequent Walmart shoppers shop all stores more often, and that holds true for Dollar Stores, too.

•82% of Frequent Walmart shoppers shop Dollar Stores each month.

•Two-thirds of Occasional and Rare Walmart shoppers are also in Dollar Stores every month, but fewer of them go weekly (18%-19%).

WALMART SHOPPERS: SHOPPING FREQUENCY AT DOLLAR STORESTOTAL SHOPPING FREQUENCY

Walmart Shoppers

FREQUENT(Once a Week

or More)

OCCASIONAL(2-3 Times a Month)

RARE(Once a Month

or Less)Base: Past 3 Month Dollar Store Shoppers 845 396 203 224

A B C D% % % %

% of Total Walmart Shoppers 59 65 59 52

Shop Dollar Stores - Monthly or More 74 82 DE 68 67

- Once a week or more often 22 27 CD 18 19

- Once every 2 to 3 weeks 27 28 27 25

- Once a month 25 27 23 23

Shop Dollar Stores - Less Than Once A Month 26 18 32 B 33 B

- Once every 2 to 3 months 16 12 19 B 20 B

- Once every 4 to 6 months 5 4 6 6

- Less often than every 6 months 5 2 7 B 7 B

53HOW AMERICA SHOPS® Where did the Walmart Shopper Go?

© WSL STRATEGIC RETAIL 2011

GOING MORE TO DOLLAR STORES

41% of Walmart shoppers are shopping Dollar Stores more now than a few years ago, for a net change of +24 ppts.

• Interestingly, it is the Rare Walmart shoppers who are going more often since the downturn. The net change for Frequent and Occasional Walmart shoppers is +19 ppts vs. +34 ppts among Rare shoppers.

CHANGES IN SHOPPING FREQUENCY AT DOLLARTOTAL SHOPPING FREQUENCY

Walmart Shoppers

FREQUENT(Once a Week

or More)

OCCASIONAL(2-3 Times a Month)

RARE(Once a Month

or Less)Base: Past 3 Month Dollar Store Shoppers 845 396 203 224

A B C D% % % %

% of Total Walmart Shoppers 59 65 59 52

Go to Dollar vs. a few years ago…

- More often 41 39 41 44

- Less often 17 20 D 22 D 10

- About the same 42 41 37 46

Net Change +24 +19 +19 +34

SPENDING MORE AT DOLLAR STORES

37% of Walmart shoppers are spending more at Dollar Stores compared to a few years ago. Half as many, 20%, are spending less, for an overall net change of +17 ppts.

•Again, Rare Walmart shoppers show a higher positive net change in spending at Dollar. This, along with their going to Mass Merchandisers and Supermarkets, as well as Dollar means Walmart appears to be losing more of this shopper.

CHANGES IN SPENDING AT DOLLAR TOTAL SHOPPING FREQUENCY

Walmart Shoppers

FREQUENT(Once a Week

or More)

OCCASIONAL(2-3 Times a Month)

RARE(Once a Month

or Less)Base: Past 3 Month Dollar Store Shoppers 845 396 203 224

A B C D% % % %

% of Total Walmart Shoppers 59 65 59 62

Spending at Dollar stores vs. a few years ago…

- More often 37 36 35 37 - Less often 20 23 D 21 D 13 - About the same 43 41 44 50 B

Net Change +17 +13 +14 +24