The Supermarket Age Challenge Proposition

brought to you by LUX team

26 November 2015

Sources: ONS

BUSINESS OVERVIEW1 2

3

~ 33y.o.

50+ less profitable

less priority to elderly people

Problem overview

LACK OFSERVICELACK OFFACILITY

• no personal assistance• not friendly

• not age-friendly equipment and layout

£34,800,000,000

1961 2015 2065

22%30%

38%

55+ y.o. population growth8p.p.

AWARE. CARE. SHARE

low-cost

To provide superior shopping experience by focusing on age-friendly facilities and services

£21m

Dundee

Edinburgh

Blackpool

Birkenhead

Southend

141870

495360

142065

88822

174800

40859

127803

37789

22738

43700

21848

64892

22872

12257

23948

Southend

Birkenhead

Blackpool

EdinburghDundee

TOP-5 cities with highest aging population density (×1000)

Total population50-69 y.o.70+ y.o.

Edinburgh has the highest population density

Sources:

MARKET OPPORTUNITY1 2

50+ UK population

23.2M36%

50+ Edinburgh population

192,69539%

Target Audience

13,5007%

% of total UK population

% of Edinburgh population

% of 50+ Edinburgh population

Estimated target audience

192,695 70% 10% £1,58050+

Edinburgh population

people who do

shopping

forecasted market share

annual grocery spent

× × ×

£21,270,000

3 Estimated sales revenue

Primary Audience: 50+ Urban Dwellers

Sources: Social Security Bullitin, Later Life in the UK, 2015

CUSTOMER PROFILEPotential Audiences

What do they spend money on?1 Food (at home/away)2 Alcohol/Tobacco 3 Household goods4 Miscellaneous (incl. presents and pet food)5 Services

PHYSICAL HEALTH

37%

eat recommended amount of vegetables

66%W85%M

are obese/overweight 32

%

have poor eyesight/hearing/speech

What do they struggle with?

MENTAL HEALTH

60%experience age discrimination

suffer from depression

28%M28%W

18% live alone

Family & Friends

Disabled

Wellness Fans

…to older customers and others.

CARE

COMMUNITY

• Helpful Ambassadors • In-store nutritionist • Health corner• Massage corner• Beauty corner

• Café• Events and festivals• Helpful workshops

Sources:

THE PRODUCTA supermarket “Ol’ Chap” which delivers...

PRODUCTSFACILITIES

SERVICES

Parking placesSpecial BusNavigation

Magnifying glassHelp buttonsWider aisles

Anti-slip floorsCustomized trolleys

Adjusted lightingEasy delivery

Proper shelvingRaised platforms

Food

Alcohol/T

obacco

Presents

Pet Food

Medicine

50%

15%5% 5%

10%

MARKETING STRATEGY

PRICINGPROMOTION

PLACES

• Product Line Pricing

• Loyalty Discount (membershippricing)

Channels• Evangelism• Direct mail• Event• Magazine• Newspaper ads • Online

Public Relation• Partnership

• Near hospital• Near age &

health institution• Near competitor

Sources: https://thenounproject.com/search/?q=marketing+startegy

Janitor

Finance Director

ClerkCashier

Optician

Store Manager

Pharmacist

Health Counsellor

Floor Assistant Cashier

Barista

Waiter

Chef Sous chef

Café Manager

Chief Executive Officer

Operation Director

Human Resource Director

Sales & Marketing Director

ORGANISATIONAL STRUCTUREAWARE. CARE. SHARE

1. Multi-skilled2. Flexibility3. Reliability

(quality control)

• Help to develop• Freshest

products• Make use of

UK`s leading edge food manufacturing industry

Sustainability

Relationship Focus

Quality Control

Just In Time Product

Sources： Aldi home page; M&S home page; Gurdian News, 2014; IGD,2010;

VERTICAL CHANNEL & PARTNERSHIP

Supply chain Partnership

55% localbrands 45% foreign

brands

characters:

• Maintenance of low costs

• Diversification of product range

Benefits:

NHS1

Holland&Barrett4Age UK3

Networking

More convenient services

Discounts / Promotions

Customers’ loyalty

Pharma2

FINANCIAL OVERVIEW

13,0006.8%

customers

£21.2msales re

venue

market share

7500 10000 12500 15000 1750010000000

15000000

20000000

25000000

30000000

Revenue Costs

# of customers

13,000

Break-even analysis1

Sales, £ 000,000

1 2 310

20

30

40

50

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

21.2732.35

43.280.8%

1.2%1.6%1.0%

1.5%

2.0%

Sales Revenue PAT (%) EBIT (%)

Sales, £ 000,000 EBIT (%), PAT (%)

Forecasted revenue

2

Year after launch

Considered Options

Angel Investor

Venture Capital

Grants/Subsidies

24%

19%

19%

8%

8%

22%

£3.75m

CAPITAL REQUIREMENTS & FINANCING

Cost of facility

Others

Starting inventory

Rent

Salary Age-friendly customisation

Sources:

BARRIERS TO ENTRY

3

Competition

Capital IntensityLife Cycle Stage (Mature)Technology Change

ConcentrationRegulation and Policy

Barriers to entry in this industry are medium

High

Low

EXPANSION PLAN

Establish franchising

Start to open own new shops

2017JF MA MJ JA SO ND

Search for partners

Organise promotional events

Move to the office

Hire additional stuff

Buy 2 buses as property

Launch / update taxi service

2018JF MA MJ JA SO ND

2019JF MA MJ JA SO ND

Launch beauty saloon

Players

Facilities Services1 2 3 4 5 6 7 8 9 1

011

12

13 1 2 3 4 5 6 7

Ol’ Chap

√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

Kaiser √ √ √ √ √ √ √ √ √ √

Tesco √ √ √ √ √ √ √ √ √ √ √ √

1. Age-friendly optimized parking places2. Bus3. Age-friendly optimized navigation 4. Magnifying glasses on several points5. Floor Assistant Help buttons6. Wider aisles7. Anti-slip floors

8. Age-friendly optimized trolleys9. Adjusted lighting10. Easy delivery service11. Optimized shelving12. Raised platforms13. Age-friendly sign

Sources:http://www.dailymail.co.uk/news/article-1050195/Tesco-reveals-Britains-pensioner-friendly-supermarket--magnifying-glasses-seats-trolleys.html

COMPETITIVE ANALYSIS Facilities

1. Escorted shopping service2. In-store nutritionist3. Health corner4. Massage corner5. Café6. Events and festivals7. Community workshops

Services

SUPPLIERSNHSAGE UK

PROVIDING SUPERIOR SHOPPING

EXPERIENCE BY FOCUSING ON AGE-FRIENDLY FACILITIES AND

SERVICES

50+ URBAN DWELLERSFAMILY&FRIENDS

DISABLED

WELLNESS FANS

SUPERMARKET SALESSERVICES

WORKFORCECONNECTIONSFINANCESVALUES

AWARE.CARE.SHARE.

WORD OF MOUTHEVENTSMAIL

KEY PARTNERS KEY ACTIVITIES

KEY RESOURCES

VALUE PROPOSITION CUSTOMERRELATIONSHIPS CUSTOMER SEGMENT

PROMOTIONCHANNELS

COST REVENUE

£21,270,000

£3,747,500

IN A NUTSHELL (BUSINESS MODEL)

THANK YOU FOR YOUR ATTENTION

ANAIS ANAISWENYANG MIN

PRITHIV GHOSALDMITRII ISHUTIN

ADLEY LEE JING CHANVIKTORIIA ANDRUKHNENKO