Contents:

1. Introduction Report Coverage DEFINITION Table 1: National Security Socio-Economic Classifications (NS-SEC) — Typical Occupations 2. Strategic Overview SOCIO-ECONOMIC BACKGROUND Table 2: Profile of the UK Adult Population by Social Grade (% of adults), 1998-2005 Figure 1: Profile of the UK Adult Population by Social Grade (% of adults), 1998-2005 Table 3: Demographic Profile of C2DE Adults (% of respondents), November 2005 Household Tenure Table 4: Profile of C2DE Adults by Household Tenure (% of respondents), November 2005 Figure 2: Profile of C2DE Adults by Household Tenure, (% of respondents), November 2005 Car Ownership Table 5: Penetration of Car Ownership by Social Grade (%), 2005 HOUSEHOLD EXPENDITURE Table 6: UK Average Weekly Household Expenditure by Socio-Economic Classification of Household Reference Person† (£), 2004/2005 Figure 3: UK Average Weekly Household Expenditure by Socio-Economic Classification of Household Reference Person (£), 2004/2005 Table 7: UK Average Weekly Household Expenditure by Socio-Economic Classification of Household Reference Person† (%), 2004/2005 3. Food BACKGROUND CONSUMER TRENDS C2DEs and Snacks Table 8: Those Who Consume Crisps and Snacks by Social Grade (%), 2005 Table 9: Snack Brands Purchased Regularly by Social Grade (% of respondents), February 2006 MARKETING AND SUPPLIER ACTIVITY Aldi Somerfield Sainsbury's ADVERTISING Table 10: Main Media Advertising Expenditure by Selected Supermarket and Grocery Chains (£000)†, Years to December 2004 and 2005 4. Home BACKGROUND CONSUMER TRENDS Table 11: Penetration of Those Who Undertake DIY Tasks at Home by Social Grade (%), 2005 Table 12: Penetration of Selected DIY Tasks by Social Grade (%), 2005 MARKETING AND SUPPLIER ACTIVITY Tesco Matalan ASDA Other Retailers ADVERTISING Table 13: Main Media Advertising Expenditure by Selected Retailers of Furniture and Furnishings (£000), Years to December 2004 and 2005 5. Clothes BACKGROUND CONSUMER TRENDS Table 14: Penetration of Selected Sports Clothing and Footwear Brands by Social Grade (% of respondents), 2004 Table 15: Penetration of Selected Manufacturer Brands by Social Grade (% of respondents), 2004 Table 16: Penetration of Selected Retailer Clothing and Footwear Brands by Social Grade (% of respondents), 2004 Table 17: C2DE Consumers' Penetration of Selected Clothing and Footwear Brands (% of respondents), 2002 and 2004 MARKETING AND SUPPLIER ACTIVITY New Look Primark TK Maxx Supermarket Fashions ADVERTISING Table 18: Main Media Advertising Expenditure by Selected Discount Clothing Retailers (£000), Years to December 2004 and 2005 6. Leisure and Travel BACKGROUND CONSUMER TRENDS Eating Out, Pubs and Clubs Table 19: Frequency of Eating in Restaurants in the Evening by Social Grade (%), 2005 Table 20: Penetration of Those Who Visit Pubs for a Drink in the Evening at Least Once a Week by Social Grade (%), 2005 Table 21: Penetration of Those Who Visit Clubs at Least Once a Month by Social Grade (%), 2005 Sporting Activities Table 22: Penetration of Regular Participation in Selected Sporting Activities by Social Grade (%), 2005 Table 23: Penetration of Those Who Have Smoked Cigarettes in the Last 12 Months by Social Grade (%), 2005 Figure 4: Penetration of Those Who Have Smoked Cigarettes in the Last 12 Months by Social Grade (%), 2005 Holidays and Travel Table 24: Penetration for Having Taken at Least One Holiday in the Last 12 Months by Social Grade (%), 2005 Table 25: Most Recent Holiday by Type of Holiday by Social Grade (%), 2005 Table 26: Sources of Information Used to Research Most Recent Holiday by Social Grade (%), 2005 Table 27: Booking Method for Most Recent Holiday by Social Grade (%), 2005 Table 28: Booking Medium for Most Recent Holiday by Social Grade (%), 2005 MARKETING AND SUPPLIER ACTIVITY ASDA MyTravel Thomas Cook Little Chef Travelodge Premier Travel Inn ADVERTISING AND PROMOTION 7. An International Perspective EUROPE THE US 8. PEST Analysis POLITICAL FACTORS ECONOMIC FACTORS SOCIAL FACTORS TECHNOLOGICAL FACTORS Table 29: Adults With Internet Access at Home (%), 2005 9. Consumer Dynamics Overview Table 30: Attitudes Towards Finance and Spending by Social Grades ABC1 and C2DE (% of respondents), November 2005 Financial Situation Food Home Clothes Holidays Financial Situation My Financial Situation is Better Now Than it Was 2 Years Ago (S1) My Financial Situation is Worse Now Than it Was 2 Years Ago (S2) Table 31: C2DEs' Financial Situation Compared With 2 Years Ago (% of respondents), November 2005 FOOD I Often Buy Supermarkets' Own-Brand Food Products in `Luxury' Ranges (e.g. Tesco Finest or Sainsbury's Taste the Difference) (S3) I Often Buy Supermarkets' Own-Brand Food Products in `Economy' Ranges (e.g. Tesco Value) (S4) Table 32: C2DE Attitudes Towards Supermarket Luxury and Value Ranges (% of respondents), November 2005 HOME I Enjoy Improving My Home, and We Do Most of the Decorating Ourselves (S5) I Enjoy Improving My Home, and Usually Employ a Professional to Do the Decorating (S6) Table 33: C2DE Habits and Attitudes Regarding Home Decorating (% or respondents), November 2005 I Am Very Worried About the Possibility of a Fall in House Prices (S7) Table 34: C2DEs Who Are Worried About the Possibility of a Fall in House Prices (% of respondents), November 2005 CLOTHES I Buy Clothes for Myself and/or Others From Discount Shops Such as Primark and TK Maxx (S8) I Would Never Buy Clothes From Discount Shops (S9) Table 35: C2DE Attitudes Towards Buying Clothes From Discount Shops (% of respondents), November 2005 I Prefer to Shop for Clothes in Independent/Designer Shops Rather Than High-Street Chains (S10) Table 36: C2DEs Who Prefer to Shop for Clothes in Independent or Designer Shops (% of respondents), November 2005 It is Good to be Able to Buy Designer Goods in Supermarkets (S11) Designer Label Have Lost Their Value as They Are So Widely Available (S12) Table 37: C2DE Attitudes to Designer Goods and Designer Labels (% of respondents), November 2005 HOLIDAYS On Holiday, I Would Try to Avoid Very Commercialised Tourist Areas (S13) Availability of Cheap Travel Means That Only a Few Places Are Now Really Special for a Holiday (S14) Table 38: C2DE Attitudes to Holiday Destinations (% of respondents), November 2005 On Holiday, I Would Prefer to Book Travel and Accommodation Myself Rather Than Use a Travel Agent (S15) Table 39: C2DE Attitudes Towards Booking Holiday Travel and Accommodation (% of respondents), November 2005 10. Supplier Profiles ALDI STORES LTD Corporate Strategy Profitability Table 40: Financial Results for Aldi Stores Ltd (£m), Years Ending 29th December 2002 and 31st December 2003 and 2004 Recent and Future Developments Advertising ASDA Group LTd Corporate Strategy Profitability Table 41: Financial Results for ASDA Group Ltd (£m), Years Ending 31st December 2002-2004 Recent and Future Developments Advertising MATALAN PLC Corporate Strategy Profitability Table 42: Financial Results for Matalan PLC (£m), Years Ending 1st March 2003, 28th February 2004 and 26th February 2005 Recent and Future Developments Advertising NEW LOOK Retailers Ltd Corporate Strategy Profitability Table 43: Financial Results for New Look Retailers Ltd (£m), Years Ending 29th March 2003, 27th March 2004 and 26th March 2005 Recent and Future Developments Advertising PRIMARK STORES LTD Corporate Strategy Profitability Table 44: Financial Results for Primark Stores Ltd (£m), Years Ending 14th September 2002, 13th September 2003 and 18th September 2004 Recent and Future Developments Advertising SOMERFIELD Ltd [KWIK SAVE] Corporate Strategy Profitability Table 45: Financial Results for Somerfield Ltd (£m), Years Ending 26th April 2003, 24th April 2004 and 30th April 2005 Recent and Future Developments Advertising TK MAXX Corporate Strategy Profitability Table 46: Financial Results for TK Maxx (£m), Years Ending 25th January 2003, 31st January 2004 and 29th January 2005 Recent and Future Developments Advertising 11. The Future CONSUMER CONFIDENCE Table 47: Confidence in Future Spending Power by Social Grade (% of adults), 2005 THE HIDDEN COSTS OF DISCOUNT SHOPPING CLOTHING FOOD HOME TRAVEL 12. Consumer Confidence METHODOLOGY KEY FINDINGS THIS QUARTER THE WILLINGNESS TO BORROW A Slow Start to 2006 Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2005, May 2005, August 2005, November 2005 and February 2006 The Desire to Borrow Stays Strong Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2005, May 2005, August 2005, November 2005 and February 2006 THE WILLINGNESS TO SPEND FROM SAVINGS Spending From Savings Declines Table C: The Proportion of Adults Without Any Savings (%), February 2005, May 2005, August 2005, November 2005 and February 2006 Table D: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2005, May 2005, August 2005, November 2005 and February 2006 Consumers Increasingly Cautious Table E: The Average Amounts Adults are Confident Spending to Purchase Expensive Items (£ and %), February 2005, May 2005, August 2005, November 2005 and February 2006 13. Further Sources General Sources Government Sources Bisnode Sources