SUMMARY In the second quarter of 2023, U.S. inflation continued to slow, as did price-per-unit increases in the convenience and multi-outlet channels. The convenience channel benefited, with channel buyers (+2.2%) and trips (+1.1%) showing year-over-year growth, led by higher-income shoppers. Channel YOY dollar sales growth even outpaced multi-outlet retailers for the first quarter since 2021. Circana’s new report, “The Convenience Store Landscape Q2 2023,” explores the latest trends in the convenience channel and how they compare to the broader MULO landscape. It also shares the top opportunities that c-store retailers should explore to support additional growth. HIGHLIGHTS Convenience dollar share of MULO+C was 18.5% in Q2 2023, slightly up YOY (18.4% in Q2 2023), and significantly up from the previous quarter (16.8% in Q1 2023). Convenience channel dollar share of MULO+C for the two-week Memorial Day holiday period (18.9%) was higher than any 2022 summer holiday. The convenience channel outperformed MULO in all top sales categories in Q2 2023, including cigarettes (-1.9% YOY for convenience channel vs. -6.7% for MULO) and beer (+5.3% vs. -1.3%). C-stores should include ready-to-drink cocktails in their alcohol assortment to align with trending customer preferences. They should monitor foodservice developments in the convenience and QSR channels to identify gaps and opportunities. To ensure they are keeping pace in the e-commerce retail space, c-stores should investigate digital-ordering enhancements.

Lip makeup was the fastest-growing product category across both prestige outlets and mass merchants CHICAGO, August 3, 2023 – U.S. prestige beauty industry sales amounted to $14 billion in the first half of 2023, a 15% increase versus the same period in 2022. In comparison, the mass beauty market generated $28 billion and grew 9%, according to Circana , formerly IRI and The NPD Group. “Beauty continues to be the darling of retail through the first half of 2023, maintaining its position as the only industry to grow based on units sold across the general merchandise and consumer packaged goods categories Circana tracks,” said Larissa Jensen, beauty industry advisor at Circana . “The beauty industry is hitting the right notes, meeting consumers’ emotional needs through new and existing products, which is especially welcomed at a time when spending power continues to be squeezed.” Here are the category-level trends propelling the beauty market forward: Makeup is making moves Makeup ended the first half of 2023 as the fastest growing category within the prestige market, with sales revenue up 18%, and outpaced sales at mass merchants by growing at twice the rate. The “Lipstick Index” phenomenon continues to prevail. In fact, lip makeup was the fastest-growing segment across all the beauty categories, and inclusive of both prestige outlets and mass merchants. These results come during a time when makeup usage is also on the rise. According to Circana’s 2023 Makeup Consumer Report , makeup usage increased by 3 percentage points in the past year and has surpassed pre-pandemic levels. Skincare sentiment is shifting Face serum, body spray, and facial cleansers were the top gainers in the prestige skincare market for the first half of the year. Fueled by new launch activity, clinical brands brought in the majority of the prestige skincare sales gains. Overall facial skincare usage in the U.S. remains flat compared to last year, according to Circana’s 2023 Facial Skincare Consumer Report . While usage remains consistent, product preferences are shifting. Consumers are increasingly turning to hybrid products that together address skin concerns and provide makeup coverage. In addition, more channel blending is taking place as 67% of consumers feel that skincare brands at drug stores or mass merchandisers are as good as higher priced department store brands, a sentiment which is up from last year. Fragrance consumers flock to value Gift sets, higher concentration fragrances, and mini sizes are outperforming the overall prestige fragrance market. Sales of fragrance gift sets grew by 26%, or twice the rate of the market. Eau de parfums and parfums were the only formats to experience a year over year increase in units sold. Minis, or fragrance sizes under one ounce, accounted for 38% of total fragrance juices sold. Hair reaches new heights Although sales revenue is significantly higher in the mass market, hair product sales continue to grow at a faster clip in the prestige business, with online capturing about half of the sales. Furthermore, hair is the category with the highest average price increase in the prestige beauty market, growing at three-times the rate of the overall industry. Styling was the fastest-growing segment in prestige hair for the first half of the year.

Circana’s Collaborative Insights Gateway will give Currys’ suppliers a holistic view of sales, stock and customer data to drive value, and improve the shopper experience BRACKNELL, UK – 3rd August 2023 – Circana, the leading advisor on consumer complexity and formerly IRI and The NPD Group, today announced a program with Currys, the UK’s leading omnichannel technology retailer, to implement its collaborative insights gateway solution. Circana’s Insights Gateway, which will be launched and branded as Currys Tech Insights, will provide Currys’ supplier partners with access to sales performance and customer insights across the Currys business – driving collaboration like never before. As the retail landscape continues to rapidly change, so do shoppers’ demands, making putting the customer first more important than ever. The Currys Tech Insights platform will be transformative for Currys’ suppliers seeking to better understand Currys customers, with the ability to access a 360-degree view of customers’ shopping behaviour, powered by the integration of customer and transaction data. As a global leader in innovative solutions and services for major retail companies, Circana’s proven ability to transform complexity into clarity – by sharing insights that help businesses not only understand, but act on, consumer behaviour – is transforming the way many businesses approach their customer-focused outreach and unlock their ability to scale. Susie Moan, Chief Data Officer at Currys commented, “We are thrilled to be unveiling the powerful new Currys Tech Insights platform to our suppliers. The platform will allow our brands to take an even more forensic approach to understanding the data behind our customers’ decision making. Together, we will have a holistic view of our customers and be able to better anticipate their current and future needs, so that we can help more people than ever enjoy amazing technology.” Sarah Pittock, Head of Gateways at Circana, said: “Working in partnership with suppliers is crucial to the success of retailers today. Such collaboration has never been more important, particularly when the market factors that influence shoppers are moving so quickly. Driving growth opportunities by sharing an understanding of the customer is pivotal to brand success. The implementation of the Currys Tech Insights platform is a real game changer for the industry, it allows brands an opportunity to realise a shared goal in putting the customer at the core of their proposition.” Currys will launch its Tech Insights platform, powered by Circana, in the UK during August 2023. About Circana’s Supplier Collaboration Gateways Circana’s collaborative gateway solutions allows retailers, wholesalers and their suppliers to see the same information and in the same way, in the retailer’s own hierarchy view, in order to work together and find new growth opportunities. Its innovative Liquid Data technology seamlessly integrates the data assets companies need, supported by mature workflow decision processes that are designed to deliver joint-business-planning practices focused on innovation and growth. About Currys plc Currys plc is a leading omnichannel retailer of technology products and services, operating online and through 823 stores in 8 countries. We Help Everyone Enjoy Amazing Technology, however they choose to shop with us. In the UK & Ireland we trade as Currys; in the Nordics under the Elkjøp brand and as Kotsovolos in Greece. In each of these markets we are the market leader, employing 28,000 capable and committed colleagues. Our full range of services and support makes it easy for our customers to discover, choose, afford and enjoy the right technology for them, throughout their lives. The Group’s operations include state-of-the-art repair facilities in Newark, UK, a sourcing office in Hong Kong and an extensive distribution network, enabling fast and efficient delivery to stores and homes. Our vision, we help everyone enjoy amazing technology, has a powerful social purpose at its heart. We believe in the power of technology to improve lives, help people stay connected, productive, healthy, and entertained. We’re here to help everyone enjoy those benefits and with our scale and expertise, we are uniquely placed to do so. We’re a leader in giving technology a longer life through repair, recycling and reuse. We’re reducing our impact on the environment in our operations and our wider value chain and we will achieve net zero emissions by 2040. We offer customers products that help them save energy, reduce waste and save water, and we partner with charitable organisations to bring the benefits of amazing technology to those who might otherwise be excluded.

New Circana report shows brands launched 16.5% fewer innovations in 2022 SME’s are flexing their agility, producing 75% of new product launches Product innovations now make up 6% of total FMCG value sales with volume and value growth making them a source of sustainable organic growth BRACKNELL, UK – 31st July 2023 – Circana, the leading advisor on consumer complexity and formerly IRI and The NPD Group, today launched its Race for Resilience: Innovation Pacesetters report for Europe. Covering the six largest markets in Europe (France, Italy, Germany, Spain, UK, and Netherlands), the report reveals declining product innovations across the last two years, particularly across larger brand manufacturers – revealing a growing aversity to the perceived gamble of new products, as sales in FMCG products decline. 144,432 new products were launched across Europe in 2022 compared to 172,997 in 2021 (-16.5%). The largest drop was seen in France where new product launches fell from 27,317 to 19,843 (-27.4%). Fewer innovations reflected both manufacturers and retailers prioritising their existing core ranges to maintain availability on shelves to protect volume and share, and perhaps declining confidence in commanding a premium price typically associated with new products – as businesses continue to grapple with inflationary turbulence. Small and medium-size manufacturers, leveraging their ability to react to changing market forces quickly, were responsible for 75% of all new products launched, contributing 68% of total value sales from new products.  While just one in four new product launches were brought to market by large brand manufacturers over the period, they delivered greater share value (32% of new product value sales) due to their distribution and supply chain advantages. Ananda Roy, Global SVP, Strategic Growth Insights, Circana, said : “The evidence from the analysis means innovation continues to be a sustainable source of organic growth, despite difficult trading conditions and the cost of living crisis. While the ability to command a significant premium is constrained, new product launches continue to deliver the volumes that brand manufacturers need to maintain growth and market share.” New product launches can feel like a gamble when there is increasing competition for shelf space, especially at a time when the industry is experiencing declines in sales volumes of FMCG products, however there is no doubt that it can add immense value too, giving brands the opportunity to expand an existing portfolio or even create an entirely new one. Innovations continue to be resilient and help to drive demand despite inflationary headwinds.” Key findings from the report include: Consumer attitudes & behaviours that determine the success of new product launches have changed – for example, shoppers expect new products to add value (e.g. have new features – 77%, be versatile by combining benefits – 72%), to be sustainable (71% expect it to be better for them and 68% says the same for the environment), to be trusted (65%), and must now fit with their lifestyle (73%) and help them to achieve their goals (67%). Shoppers are more likely to try new products that are at a lower price (59%), readily available (50%), easy to shop & use (both 56%), fits the shopper’s routine (46%). Recommendations from family and friends and a large well-known company also play important roles (both at 47%). Celebrity or influencer recommendations or endorsements convince just nine percent of shoppers to try new products, despite their ability to attract awareness. Satisfied trialists expect physical availability next time they shop – 48% of trialists look for the new product next time they shop and less than 20% ask in store or go online to buy if it isn’t available. 23% will look for another innovative product like it, usually from another brand. It is important to get the product experience right the first time, as nearly two-thirds of shoppers (64%) would not buy a new product again if it didn’t meet expectations . New product launches in the chilled and fresh category delivered the most value despite fewer products being launched. Here manufacturers and producers tapped into healthy eating trends such as plant based and natural. Value share from innovations in the sector increased and now represents 22% of total FMCG innovation value share, some €4.8bn. Innovation drove 6% of total baby food value sales, a growth of 75% over last year as parents sought healthier options that met a variety of taste, ingredient and diet options. New products in this category now represent €12bn in value sales. Innovation in pet food rose by a tail wagging 39% as more people took ownership of pets. Led by manufacturers in the UK and Italy, the innovation is about providing our furry friends with healthier treats and food. The value share contributed now 4.3%, an increase of 51%. Frozen food saw product value up by 40% on the previous year , driven byconsumers choosing frozen instead of chilled and fresh to meet new food planning behaviours and avoid waste. Brewers had a reduced thirst for new product launches focusing instead on the growth of segments of low/no alcohol and ready to drink. Alcohol volume sales overall are showing a significant decline. This action resulted in 15% less value share derived from new products. Range rationalisation makes it harder for new products to survive – with continued range rationalisation from retailers who want to maximise the return on shelf space by axing slower selling items, it is harder than ever for new products to survive. Of all of the new products launched in 2021, just 74% remained on shelves in their second year. Although approx. 90% of launches still contribute less than €500k per SKU in their first year of launch, 23% flourished, doubling their sales value in the second year. Roy concluded : “To remain competitive, brand owners need to make the benefit of the innovation relevant to evolving consumer needs. They need to tap into and market the transformation, not just the product feature. A targeted innovation strategy can help address the relentless search for growth in 2023 and beyond, especially as we continue to see the rules of the consumer goods category being re-written. This evolving innovation eco-system will be the driving force for change across an industry struggling to cope with the changing consumer landscape.” Circana Contact Ananda Roy Phone: +44 (0) 7730 912 077 Media Contact Nikki Alvey Phone: m. +44 (0)7973 354 706

The racquet sports equipment market is nearly six-times larger than it was just three years ago, dominated by pickleball fever [CHICAGO] – July 27, 2023 – The popularity of racquet sports both as activities and as fashion is making a mark on apparel, footwear, and equipment sales. In the U.S., sales revenue for tennis apparel increased by 15% in the 12 months ending June 2023, versus the prior year, and is up 38% versus three years ago, according to Circana , formerly IRI and The NPD Group. Following in these footsteps, tennis shoe sales grew by 21% versus the prior year and increased 37% compared to three years ago. “The growth of the tennis soft goods market is no doubt a result of heighted appeal for both tennis and pickleball, but there are other powers at play,” said Kristen Classi-Zummo, apparel industry analyst at Circana . “A balance of sporty and chic, tennis apparel has carved a place in consumers’ post-pandemic wardrobe evolution as they swap their sweats for something more stylish without sacrificing on comfort. The versatility of athletic dresses, skirts, and other tennis-inspired apparel is having just as much of an impact on sales as the sport itself.” The market for athletic skirts and dresses grew a combined 24% in the past 12 months, compared to the prior year, and sales have more than doubled since 2019. Sales for tennis-inspired sneakers, which have the performance-based heritage of a tennis shoe but intended for everyday wear, increased by 9% in the past 12 months, compared to the previous year. “While it’s clear that the increased participation in racquet sports is propelling the sales of the performance footwear worn for these sports, the related — and perhaps even more interesting — trend is the growth of tennis footwear as a fashion statement,” said Beth Goldstein, footwear industry analyst at Circana . “Through the rising popularity of tennis-inspired footwear, we can see the impact that the interest in tennis as an activity is having on fashion — by reaching a much broader audience than those who are actually playing the sport.” “Racquet sports are trending right now,” said Julia Day, executive director of business development at Circana. “From pickleball’s popularity to the recent excitement of Wimbledon and the upcoming U.S. Open, these are moments that create an enthusiasm that transcends the sports themselves.” Pickleball rules the court Through the lens of Circana’s Checkout , its receipt-based tracking service, which recently expanded to include data for the U.S. outdoor and sports equipment markets, the growth in racquet sports equipment sales is primarily being led by more buyers in the market – 20% more compared to one year ago – and buyers spending more. Year over year sales for racquet sports equipment increased by 27% to $684 million in the past 12 months, led by the continued surge in pickleball sales. Capturing $50.8 million in retail sales just three years ago, pickleball paddle and ball sales is now a $304.2 million business. These sales results align with the latest participation findings reported by the Sports and Fitness Industry Association (SFIA): pickleball maintained its position as the fastest-growing sport in 2022. Furthermore, for the first time since 2015, every racquet sport increased its total participation number compared to 2021. “I may not have a crystal ball, but I can confidently say that pickleball is here to stay,” said Day. “Pickleball is fun, easy to learn, highly social, and has a low barrier to entry. We are seeing market share shifts, as pickleball racquets are gaining share at the expense of tennis racquets. To become the dominant player, retailers and manufacturers need to equip themselves with actual sales and shopper data to understand market dynamics and quantify opportunities.”

Air fryers and voice-controlled digital assistants are popular kitchen items Chicago, July 28, 2023 — Each kitchen in America reflects the lifestyle and tastes of the household it serves and shares similarities with other kitchens across the country. To capture these similarities, Circana , formerly IRI and The NPD Group, recently conducted an audit of America’s kitchens to help food companies and housewares manufacturers understand what appliances, cookware, utensils, and food ingredients U.S. consumers have in their kitchens, what they think of their cooking skills, and their usage and sources of recipes. Below is a small sampling from Circana’s 2023 Kitchen Audit Study , which surveyed a U.S. representative sample of adults 18 and older: Two-thirds of those who own an air fryer used it in the past four weeks​. 55 and older consumers are more likely to have celery on hand than younger adults. Adobo spice is more likely to be in the kitchens of Northeast U.S. consumers. Just under one-third of U.S. adults own a stir fry pan or wok. 54% of meal preparers own a voice-controlled home device; setting a timer and converting recipes are among the most popular kitchen-related device commands. Even novice cooks will attempt baking cakes at home with a cake mix. 34% of cake mix consumers describe their cooking skills as limited. “Kitchens are command central for U.S. households, and knowing what foods, beverages, appliances, cookware/bakeware, utensils, and other cooking materials on hand is a gold mine of actionable information,” says Darren Seifer, Circana food and beverage industry analyst . “Not to mention how fascinating it is to get a peek inside America’s kitchens.”

In May 2023, total retail sales revenue, encompassing both discretionary general merchandise and consumer packaged goods (CPG), increased by 2% compared to the same month the previous year, while unit sales declined by 3%. Although consumers are engaged and spending, they are not doing so at full throttle. And while price plays a role in today’s consumer spending habits, it is not the primary driving force. No big general-merchandise shopping channel shifts Clearly, spending on general merchandise categories is still being affected by rising prices and declining consumer sentiment, but the anticipated changes in where people shop have not materialized. Source: Circana, Checkout Omnichannel Tracking, general merchandise, January – April 2023. Industries include accessories, apparel, auto products, footwear, home décor, home improvement, home textiles, housewares, juvenile, office supplies, remaining gm, sports equipment/team sports, prestige beauty, small appliances, technology, toys, video games . Excludes grocery/drug, convenience/gas, restaurant channels; not displaying “all other” channels. “E-commerce has gained the largest share of general merchandise sales revenue so far this year, and department stores are maintaining a steady share of the market,” said Marshal Cohen, chief retail industry advisor for Circana . “Typical consumer behavior during economic uncertainty would have consumers flocking to value-oriented options. But mass merchants, warehouse clubs, and off-price retailers have yet to gain the expected traction.” “Recent directional spending shifts, elevation in unemployment, air-quality concerns in the U.S., and other factors that could jolt consumer behavior will be critical to monitor,” Cohen said. “But for the time being, consumers are still buying prestige beauty products and luxury items, and they continue to pay a premium for most of their purchases.” CPG shopping shift: a harbinger of larger retail changes The way consumers are adjusting their CPG shopping behavior reveals brewing retail changes. According to Don Unser, president of thought leadership for Circana . “While overall spending remains elevated due to higher selling prices, consumers are approaching their shopping trips differently, and basket size is smaller than it was a year ago. CPG consumers have also started their migration to value-focused retail options.” Source: Circana, OmniMarket™ Core Outlets, Circana OmniConsumer™ Scan Panel, all outlets, CY 2019 — CY 2022, 52 weeks ending 4/23/23 vs. YA, NBD aligned. Note: Walmart is not included in grocery or mass/super. Convenience data is from Circana OmniMarket™ Core Outlets; data for other channels is from Circana OmniConsumer™ Scan Panel. Only warehouse clubs and dollar stores have had sustained growth since 2019. And during the 12 months ending April 2023, unit sales at warehouse clubs declined just 3% from a year ago, which is much lower than most other channels. These changes in CPG channel shopping behavior are likely a precursor of the changes on the horizon for the rest of the retail world. General merchandise and CPG retail categories tell their own stories While certain retail sectors will continue to experience fluctuations, consumer engagement can be elevated by offering innovative products, leveraging technology, providing exceptional customer service, and actively involving customers in the shopping process. By understanding and catering to the shifting landscape of consumer preferences, retailers can achieve increased sales and cultivate long-term customer relationships. Read on to learn how retailers and manufacturers can elevate shopper engagement, in this sampling of general merchandise and CPG categories. Video Games: New Games are the Industry’s Lifeblood Mat Piscatella, Industry Analyst New games are the lifeblood of the video game industry. As a hits-driven business, these new experiences not only fuel game sales – they also encourage adoption of hardware, accessories, and subscription services. Several recent blockbuster new video game releases have reinvigorated the category, including The Legend of Zelda: Tears of the Kingdom, Diablo IV, and Final Fantasy XVI, among others. Combined with improved availability of PlayStation 5 and other console hardware, consumer spending has increased across video game console software, hardware, and accessories so far this year. Key takeaways Following months of production delays, many big new games are finally finding their way into the hands of video game fans. PlayStation 5 and Nintendo Switch hardware have benefitted most from this increase in blockbuster releases. Accessory sales have also benefited, including headsets and premium gamepads. Toys: Changing Channels and Elevating Engagement Juli Lennett, VP, Industry Advisor With consumers spending more of their budgets on food and other necessities these days, you might expect consumers to flock to off-price or dollar stores to seek out low-priced toys. In general, off-price stores – and some (but not all) dollar stores – are gaining share. However, it’s the online channel that is gaining the most share, specifically marketplaces. This shift likely doesn’t have anything to do with buying low-priced toys; instead, it has more to do with finding a specific toy that isn’t readily available in the usual channels because it is out of stock or not carried at all. While most of these channel-share gains tie back to an increase in the number of buyers, not all retailers within these channels gained those buyers. Regardless of the channel, here’s what retailers and manufacturers can do to elevate shopper engagement and grow share … Key takeaways Optimize marketing effectiveness in media by pinpointing consumers that have the highest propensity of buying into your brand or competitive brands based on actual purchase behaviors (using Circana Audiences). Reach your buyer across all ages where they are, whether that is through social media, old-school email marketing … and everything in between. Create brand moments that will electrify existing buyers to buy deeper into the brand while winning over new buyers. Deliver your toy brand across multiple price points so consumers have choices based on their financial needs. While consumers are shopping with you, remind them of future purchase occasions for toys like a birthday or holiday. Plan and execute a seamless omnichannel strategy allowing consumers to find the right toy online and giving them choices on how to acquire that toy (i.e., in-store, curbside or ship-to-home). Apparel sales success requires a multi-dimensional approach Kristen Classi-Zummo, Industry Analyst When examining the channel trends in the apparel industry, there isn’t one single narrative that is winning with consumers. Consumers continue to shop where they like and buy what they want. If the experience and product offering isn’t ideal, they aren’t trading down, they just won’t buy. Retailers must understand that a one-dimensional approach, such as solely focusing on offering the lowest price, is not the key to success. Key takeaways The growth of warehouse clubs is a good example of a successful multi-dimensional approach, with an increase of 14% in dollars and 5% in units in 2023 (Jan-April 2023, Circana consumer data). The warehouse club channel effectively leverages value, convenience, and strategically placed apparel. By pulling this variety of levers, warehouse clubs successfully convert their grocery shoppers into apparel buyers. Food: Winning the Grilling Season with Meat Chris DuBois, Protein Practice Lead Summer has arrived and with it the start of grilling season, outdoor entertaining and travel. Across entertaining, every day and weekend occasions, two-thirds of shoppers plan to grill as much as (50%) or more (19%) than last summer. New grills (31%) and the enjoyment of trying new foods and new barbecue recipes (34%) are important drivers behind the growth in grill occasions, according to shoppers surveyed in May. Key takeaways The meat department is well positioned to benefit retailers and consumers. While perimeter departments were the first to feel inflation’s surge back in 2021 and 2022, price increases are moderating and reversing. Target special occasions and events that are centered on home entertaining. Keep in mind that 67% of consumers who like to entertain at home plan cookouts and barbeque gatherings this summer and 21% of consumers plan to watch sporting events together with friends — opening the door to sports-focused cross-merchandising opportunities. Offer grill-ready meat and poultry offerings, in addition to cross-merchandising displays encouraging shoppers to add a few more items in the basket. “With traditional grocery ceding meat market share to other channels throughout the past year, summer grilling is the key to winning back trips”, shared Chris DuBois, Practice Lead, Protein for Circana (formerly IRI). Home-centric Lifestyle Leaves the Door Open for Shopping Inspiration Joe Derochowski, VP, Industry Advisor The pandemic increased demand for home-related products because all our activities and attention were focused on our homes. Although we’ve returned to many of the same things we did out of the home before the pandemic, we still live a more home-centric lifestyle than before the pandemic and spend most of our time caring, cleaning, feeding, and comforting our families. Our needs have shifted from the height of the pandemic as more of us live a hybrid work life, and we’re looking for new inspirations and solutions for our current lifestyle, including how we shop. Key takeaways Over 50% of home goods are purchased online, opening the door for social media platforms, like TikTok, YouTube, and Instagram, to influence many online purchases. This momentum will continue making social media a critical marketing channel for the home industry. Although unit sales of home products are declining, they are still above the pre-pandemic level. The industry is in a pull-forward phase and will see declines until 2025. To be innovative and inspire your customers, it’s critical to follow the consumer’s path to purchase. You need to find ways to make the consumer’s journey on this path more convenient, faster, and better as their needs shift, their life moments change, and their lifestyles evolve.

Stabilization late in 2023 will be followed by quarterly acceleration of gains though 2024 CHICAGO, July 10, 2023 – U.S. B2B technology sales performance is expected to stabilize in the second half of 2023 and return to growth in 2024 as economic conditions improve. Late demand improvements in 2023 will not be enough to offset earlier contraction in IT spending and declines in average selling prices (ASP), resulting in a forecast annual sales revenue decline of 7%. However, growth overall will likely see modest gains in the first quarter of 2024, accelerating throughout next year, resulting in 3% revenue growth, according to the latest Future of B2B Technology Forecast from Circana , formerly IRI and The NPD Group. “This has been a particularly challenging year for B2B technology following peak performance in 2022 when a return to the office spurred additional demand and pull-forward of device purchasing, but growth is on the horizon,” said Mike Crosby, executive director and B2B technology industry advisor for Circana . “Digital transformation is further contributing to a shift in the mix of IT growth drivers, as software and services have been capturing an increasing share of spending, and this strong demand is expected to continue.” By the end of 2023, sales of hardware is expected to represent 58% of B2B revenue, hitting its lowest point since 2019 when it accounted for 67% of annual B2B technology spending. Computers will drive the largest revenue declines, followed by multimedia and storage hardware, but these losses are offset by $1.4 billion growth in commercial software projected in 2023. B2B technology industry growth in 2024 will be supported by a return to positive performance of desktop and notebook computer sales, as well as the continued adoption and sales growth of commercial software and cloud services. “Improving economic conditions, strong demand for software and cloud-based infrastructure, and momentum coming from pandemic-deployed devices entering a refresh cycle, compounded by Windows 10 sunsetting will all be contributors to the expected growth over the next two years,” noted Crosby. “Businesses have been forced to prioritize spending, but declining inflation will allow more financial focus on addressing the evolving commercial needs and new technology requirements for higher performance devices that are fast becoming a reality.”

Circana CREST service analysis reveals a positive outlook for the remainder of 2023 BRACKNELL, UK – July 5, 2023 – Circana , the leading advisor on consumer complexity that formerly traded as IRI and The NPD Group, today launched its latest results from its CREST service analysis, revealing continued recovery for the European foodservice sector as consumers across five markets return to bars, restaurants and other foodservice establishments. Total spend for the sector is now back to pre-pandemic levels (€308 Bn in 12 months ending May 2023). Spain is the first country to show spend growth to pre-pandemic levels (8%) for the year ending May 2023 compared with 2019. It is closely followed by Italy with 3% growth and Great Britain, down a nominal 1%. Germany lags slightly, down 2%, whilst France, with restrictions still in place in early 2023, is down 6%. Whilst consumer spend has recovered to almost pre-pandemic levels in most countries, the data revealed that the sector is still seeing a long-tail COVID-19 impact, with 1 in 4 European consumers (24%) saying they still consider restaurants a risk for infection. This reduces when they can eat outside. Because of this, changes to consumer’s lives, such as incremental work-from-home and the continued cost of living crisis, the number of consumer visits still lags pre-pandemic levels by 11%. The impact is more varied by channel. For the first time since COVID-19 hit, consumer spend in quick service restaurants (QSR) rose above pre-COVID-19 levels in June 2022 to 8% at the end of May 2023. Full Service Restaurants (FSR) continue to recover whilst workplace and student canteens remain in double-digit losses, with new working habits continuing to impact the sector even while many people are back in offices for at least some of the time. Jochen Pinsker, the Senior Vice President of European Foodservice at Circana who has tracked foodservice and consumer behaviour trends for more than 20 years, commented: “Many in the industry can view the spend in foodservice as a sign of recovery, but this is mainly being driven by inflation and masks the fact that consumers are making fewer visits. There is, however, large potential to bring many consumers back into restaurants, especially as the outdoor season begins.” For consumers that are eating out, Circana revealed that growing average eater checks have helped get money into cash registers (an increase of 11% from May 2019 to 2023). Whilst people claim high price sensitivity, their actual behaviour hasn’t significantly changed: Price as a reason for choice has yet to grow, while satisfaction with value for money (65%) and re-visit intentions (60%) remain high. Pinsker continued : “That said, confidence remains low as factors like inflation and economic uncertainty are concerning to consumers, which is why we are seeing small changes to reduce costs where possible – including using price promotions, cutting down on add-on items and switching to lower price channels.” Circana identified three key areas for growth: The need to socialise continues to motivate people to eat out (35% in May 2023). The data revealed an opportunity for growth in afternoon visits – which has risen from 18% in 2019 to 21% post-COVID. In fact, the importance of socialising and treat visits is growing at the expense of convenience-driven purchases. Pinsker recommended: “Create an atmosphere and ambience that encourages consumers to spend more time in. Look at extending opening hours and creating sharing products.” High demand for healthy and sustainable food , especially after the pandemic. 50% of consumers said they were more likely to order healthy food at restaurants than before the pandemic (2019 compared with 2022). Furthermore, 53% of consumers now prefer restaurants that are focused on sustainability (reducing waste and plastic use). Pinsker added: “Whilst healthy and sustainable choices are important, our data showed that product quality and choice are the most important drivers for consumer decisions when deciding where to go. This is closely followed by location/atmosphere. Promotions were cited as a reason for choice by just 5% of consumers.” Consumers love to order digitally. Whether for delivery, to pick up, or even in a kiosk restaurant, spending has reached €31 Bn – in May 2023.Click&Collect is now the fastest growing service – growth was on the increase pre-pandemic, skyrocketed during that period and is still experiencing further gains – ten percent growth on 2022 figures to reach €10 Bn in 2023. Pinsker commented: “Click&Collect has proved popular during and post pandemic with consumers. Being able to waive payment processes, ordering at their own speed and enjoying loyalty programmes has paid off. Restaurants are, however still struggling to make delivery options work for them.” Notes to editors: CREST panel data captures consumer information collected from Circana’s online consumer panel in five European countries (France, Germany, Italy, Spain, and Great Britain) about commercially prepared meals, snacks and beverages, and provides a detailed understanding about where consumers are eating, what they eat and how much they are spending. The data covers 2023 year to date (end of May).