There is an art to losing, or not gaining as quickly as previously expected. A story can always be shaped, even in the face of reality, that allows a company to lose gracefully in the hope that any dip in fortunes can be stemmed with a shift in fortunes. We are seeing this in the broadband market as differing key performance indicators are being used to show the best possible version of reality. First, we should note that there is a fundamental difference between “broadband” and “internet”. These are not interchangeable terms, and this is important when considering how we measure the digital divide. But the terms are often used somewhat interchangeably, such as the FCC’s plan to offer “ Broadband nutrition labels ” that apply to services of all speeds. And while there have been efforts to grow broadband access, such as the passing of the Bipartisan Infrastructure Law, success is being measured by “internet subscriptions” with results ranging from the reasonable (15% of people in New Hampshire and Washington state do not have internet) to the depressing (39% of Mississippi residents missing internet). It gets worse when we remember this is “internet” not broadband access, which is what the infrastructure bill is working to be support. Once we ignore the sub-25 Mbps households, the data is depressingly worse still. Take the New Hampshire figure above, for example: while the White House reports 15% of homes have no internet, the Connected Intelligence Broadband America report highlights that 52% of households have less than 25 Mbps download speeds. More than half. And as for Mississippi, where not even the bland internet terms can make matters look good… only 28% of households have broadband (NPD’s Broadband America report provides full, county-level details across the U.S.). State Level Broadband Penetration Source: NPD Connected Intelligence, Broadband America report, May 2022 Affordable Connectivity Program Over 12 million households in the continental U.S. have reportedly taken advantage of the Affordable Connectivity Program. That equates to 26% of homes that are estimated to be eligible. And while that is obviously a great step forward, there are still 74% of eligible homes not connecting. We believe part of the reason is the change from the previous Emergency Broadband Benefit, which was available to a smaller segment of the market but offered a higher discount of $50 per month, to the new Program which provides a $30 discount. That may not seem significant in the grand scheme of things, but an additional $20 per month, in addition to a significantly rising cost of living, can make broadband a “nice to have” rather than must have. Indeed, Spectrum, in its Q2 results, cited the disconnection of 59,000 homes that had been on the Affordable Program previously. That is believable: consumers that were on the previous Emergency Broadband Benefit saw a price increase in March. Spinning the Mobile Competition Spectrum was quick to say that these disconnections were consumers reverting to a smartphone-based solution, which helps support the impact of the Affordable Connectivity Program changes. But again, we suspect that there is a definition challenge in this interpretation that bodes well for the broadband market overall, but less so for the incumbent internet providers. We do believe that some homes will have dropped their fixed broadband solution – particularly as the cost of living has increased putting additional pressure on lower-income homes – but it is far from the full story. Instead, it is possible that many homes have dropped their incumbent provider for an alternative broadband solution from a carrier better known for offering smartphone-based solutions. And that is hardly a nuance of the facts. Verizon and T-Mobile are having a significant competitive impact on the broadband market with their fixed wireless access (5G to the Home) solutions. According to public reports, Verizon enjoyed consumer-based fixed wireless access net adds of 168,000 while T-Mobile saw an increase of 560,000 net adds, bringing its FWA base to nearly 1.5 million (a mix of business and consumer accounts, but we anticipate that the majority are consumer). And T-Mobile was quick to point out that more than half of its new net adds were households previously using cable-based broadband. And perhaps this is the good news after all of the spin. Regardless of which carriers win or lose, we do expect the number of connected (ahem, broadband) homes to increase over time. And fixed wireless access will, at least in the short term, be the winner as there is virtually no additional CAPEX to expand the footprint (at least assuming that 5G is installed on the towers). Get insights straight to your inbox

—Dine-in restaurant visits grow by triple-digits August 9, 2022 — With the COVID public health restrictions lifted early in 2022, the Canadian restaurant industry began recovering from the steep declines it experienced during the pandemic lockdown periods. The industry finished the second quarter ending June with physical and online visits up 17% compared to a year ago, 2% below the traffic level in the second quarter of 2019 before the pandemic, reports The NPD Group . Restaurant customer spending, which, in addition to increased visits, reflects higher costs, grew by 30% in the quarter compared to a year ago, up 9% from the pre-pandemic level. Quick service restaurant (QSR) visits, representing 76% of total restaurant traffic, increased by 11% in the second quarter compared to last year’s quarter, 2% below the pre-pandemic level for the same period in 2019. Full service restaurant (FSR) visits, representing 24% of all restaurant visits, were up 44% in the quarter versus a year ago and down 1% compared to the second quarter of 2019, according to NPD’s daily tracking of the Canadian foodservice industry . Pent-up demand for dining at restaurants was evident in the 193% jump in dine-in visits in the second quarter compared to a year ago. Dine-in visits to full service restaurants grew by 200%, and quick service on-premises traffic increased by 187% over the second quarter year ago. Off-premises visits, including carry-out, drive-thru, and delivery, declined, except for full service delivery, compared to the significant gains each service mode experienced at the height of pandemic lockdowns. Although digital orders declined by 8% in the quarter from a year ago, digital ordering is 170% above the pre-pandemic order level. The morning meal daypart, which includes breakfast and A.M. snack and represents the largest share, 30%, of daypart traffic, increased visits by 19% in the second quarter compared to a year ago. Lunch visits, representing 26% of daypart traffic, grew by 21% from a year ago. At the supper daypart, which holds 25% traffic share, visits increased by 19%, and P.M. snack traffic, representing 17% of daypart share, grew by 8% in the second quarter compared to a year ago. “The restaurant industry’s recovery story continues in a positive direction. Notably, off-premises visits continue well ahead of historical levels,” says Vince Sgabellone, NPD foodservice industry analyst . “The recovery trends are occurring across the full service and quick service restaurant segments. These segments are on an equal footing now, not competing on convenience or atmosphere alone. They are both competing on price, value, and food quality.”

By Jennifer Pelino EVP of Global Media Solutions, IRI Leadership teams of CPG companies continue to operate in an environment of increasing and significant uncertainty. One of the biggest challenges they face right now is the inability to accurately predict just how high inflation will go or how long our current inflationary environment will last. This creates significant ongoing uncertainty around future input costs, consumer prices and related shifts in consumer demand, and changes in labor costs. Additionally, supply chain issues have been exacerbated even further by the current environment of geopolitical instability, with some CPGs questioning whether to slow their investments in conflict-torn markets or even to exit them altogether. The looming threat of a recession provides yet another element of unpredictability. Expected Manufacturer Responses — and the Impact on Media Campaigns In response to these challenges and ongoing uncertainties, we expect advertisers will continue to look for ways to maximize their media investments. Per new Advertiser Perceptions data, one in five marketers has already cut their spending, and budgets have decreased by an average of 16%. Many marketers are cutting back on expensive upper-funnel operations that are crucial to creating brands. That dampening has affected CTV (connected TV) and digital television, which had previously benefited from the pandemic-driven trend toward streaming and social media. In these inflationary times, every dollar being spent in media needs to work harder. For consumer products where habitual behavior drives buying decisions, understanding what consumers have previously purchased is the undisputed best predictor of their future behavior. How Marketers Can Effectively Respond You need data that helps you understand all the different dynamics at play and what to do next to maximize your campaign effectiveness with consumers. At IRI, we have sales data from all the top retailers from their loyalty cards, including Kroger and Walgreens exclusively. This passively collected data allows us to know for certain what consumers are purchasing, their lifestyles and what economic factors will contribute to their next purchase. In fact, we can understand this from almost everyone in the U.S. due to having the largest loyalty card data set in this space (covering 93% of U.S. households). Using this data to target the right consumers in your consideration set yields more effective and efficient advertising results — up to four times improved results and, when you combine it with our optimization efforts, you can see up to nine times better lift. Our tools can help you get a better return on your advertising spend and measure your results more effectively so you can justify your budgets and continually enhance your media performance over time. These tools include: DaaS (Data as a Service) Solutions – You can enrich your first-party data to gain insights, segment, profile and build audiences from IRI’s verified purchase data. Access to the data is driven through clean rooms — in collaboration with partners and platforms — so that PII (personally identifiable information) is anonymized, processed and stored in a privacy-compliant way. IRI Audiences – Use purchase-based data to create audiences based on consumers’ propensity to purchase your products, so that you can maximize the targeting, relevance and sales impact of your investments — even on lower-cost media channels such as programmatic digital marketing. You can target as much of the addressable U.S. as desired, from most valuable to least valuable using a proven purchase-derived methodology. By accessing verified data at scale, you can reduce your media costs without sacrificing quality or marketing impact. IRI Optimization – Improve your in-flight campaigns to squeeze out as much return on advertising spend (ROAS) as possible. Our data programmatically helps you optimize your campaign tactics, improve budget allocations and maximize ROAS. IRI is uniquely positioned to help clients find incremental reach due to the depth and breadth of our data coverage. In these uncertain times, it is more important than ever to target key audiences effectively and measure those results accurately. Using the right tools, marketers can turn this immense challenge in the current market into a big opportunity. You will be able to reinforce the value of marketing and better support your organization’s success by strategically investing in the audiences and channels where those important yet sometimes limited dollars will have the greatest sales impact.

By Ray Florio , Growth Consulting , IRI The U.S annual inflation rate for June 2022 reached a staggering 9.1% and shows little signs of abating. While some will debate whether we are already six months into a recession or not, inflation has essentially created a similar impact on shoppers that has already lasted over a year: every dollar becomes dearer, and shoppers are making more careful choices with their spending. Inflation also pressures manufacturers and retailers in several direct and indirect ways. Directly, rising fuel and transportation prices are combining with increased raw materials costs to boost production costs. Indirectly, the need for retailers to earn higher markups, stronger wage competition and a surge in rent and real estate prices also threaten margins. IRI research reveals that a significant plurality of shoppers will reduce their spending on their top staples. Some of this reduction will be due to migration to value brands. To achieve continued, sustained growth, brands must create a better balance between price and value proposition. The question now becomes how manufacturers and retailers can identify and create new revenue opportunities while sustaining shopper loyalty through strategies that meet consumers’ shifting needs. Even with a migration to value, manufacturers and retailers can continue to drive profitable growth, keeping in mind that the goal is not just to take price, but to build sustainable pricing leverage. Over the short term (within the next year), it is important to identify the optimal everyday price points and promo calendars by channel for each product and to ensure that each channel has the right pack sizes from the existing portfolio. Over the immediate term (one to two years), brands need to find opportunities for new and changed pack sizes by channel to drive new occasions. In addition, they should refine their messaging and positioning to improve the willingness of shoppers to pay without incurring additional promotion costs. Over the long term (two to five years), brands should focus on tailoring their innovation pipelines to deliver the attributes and benefits for which shoppers are willing to pay a premium. To offset cost increases and provide a better value proposition to the shopper, manufacturers and retailers should consider focusing on four strategies: Capitalize on current pricing leverage stemming from existing brand strengths to answer these questions: What is the “right” price and promotion structure to meet channel-specific shopping needs? Which items must compete on price, and which can support premium pricing? What are the most effective trade strategies and contract agreements by brand and retailer? Strengthen margins with lower impact when the volume tradeoff is positive to answer these questions: How can we better capture certain consumer segments based on our price and pack offerings? What are the occasion “gaps” in our portfolio by channel, and how can we fill them with new price packs? How can we meet key price-per-unit and price-per-volume thresholds in a cost-effective manner? Drive even stronger differentiation and shore up gaps versus other brands to answer these questions: How can we improve the price realization within our existing portfolio? How can we change the consumer preference for our product through different on-pack communications? How can we better message our promotional events to drive stronger returns on our existing spend? Tailor the innovation pipeline around brand strengths to drive profitable growth to answer these questions: What are the opportunities for premium innovation to drive growth in an otherwise stagnant category? What benefits and attributes can we rely on to drive a stronger sustained value proposition than our competitors? What are the most efficient options for defending against potential competitor entrants and/or launches? The past few years of COVID-19 have brought enormous disruptions to the CPG environment, along with significant growth in some areas. Inflation brings additional disruption and further hastens shifts in the ways shoppers research, purchase and use food, beverage and non-food items. And while disruption can be disconcerting, it also creates opportunity. Savvy brands and retailers will seize that opportunity by successfully answering the questions above. In the process, they will gain a deep understanding of the factors that drive shopper decisions and can then devise and execute the right strategies to capitalize upon them. Using this approach, they can gain market share and sustain profitability, even in a challenging environment. Get insights straight to your inbox

Spending Fell by $1.78 Billion Compared to Q2 2021, Content Declined $1.71 Billion Port Washington, NY, August 2, 2022 – According to the Q2 2022 Games Market Dynamics: U.S.* report from The NPD Group , overall total consumer spending on video gaming in the U.S. totaled $12.35 billion in the second quarter (Q2) of 2022 (April – June), a decline of 13% when compared to Q2 2021. Non-mobile subscription content spending was the quarter’s only growth category, with all other categories falling. Mobile content contributed most to the overall decline. Data from Sensor Tower shows U.S. consumer spending in mobile games during the first quarter fell 12% from Q2 2021. “While our projections foresaw a downward trend in mobile spending as life in the U.S. began its return to a new normal and consumers had fewer opportunities to engage with these titles, the current economic environment has certainly contributed to a more expediated decline. Still, the expenditure by U.S. consumers in mobile games remains higher than it was pre-pandemic,” said Randy Nelson, head of insights at Sensor Tower. “We originally forecast U.S. mobile game industry revenue in 2022 to exceed that of 2021, but the economic uncertainty of the coming months will undoubtedly impact how that unfolds.” Overall content spending in Q2 reached $10.97 billion, a 13% decrease over Q2 2021. Subscription content was the only segment to post positive gains. Hardware and accessories declined 1% and 11%, respectively. Among the best-selling and most played games across all platforms in the second quarter were Among Us, Angry Birds 2, Bingo Blitz, Call of Duty: Warzone, Candy Crush Saga, Candy Crush Soda Saga, Clash of Clans, Coin Master, Diablo Immortal, Elden Ring, Evony: The King’s Return, Fortnite, Grand Theft Auto V, Homescapes, Kirby and the Forgotten Land, LEGO Star Wars: The Skywalker Saga, Madden NFL 22, Mario Kart 8, Minecraft, MLB The Show 22, Pokémon GO, Roblox, Royal Match, The Sims 4 and State of Survival. “Higher prices in everyday spending categories such as food and gas, the return of experiential spending such as travel and attending live events, a lighter release slate of new games, and continued new generation console hardware supply constraints were all likely contributors to the decline seen in the second quarter,” said Mat Piscatella, games industry analyst at The NPD Group. “After a period of sustained growth, consumer spending continues to trend above pre-pandemic levels. However, unpredictable and quickly changing conditions may continue to impact the market in unexpected ways in the coming quarters.” Video game hardware unit sales were led by Nintendo Switch, while PlayStation 5 hardware generated the highest dollar sales in the second quarter. Methodology: Games Market Dynamics: U.S. provides a comprehensive measure of the consumer spend on video games in the U.S. including purchases of video games hardware, content, and accessories. It is released on a quarterly basis and provides insight and trending into the broader consumer spend on the industry including physical format sales such as new and used physical retail sales as well as game rentals, and digital format sales including full game digital downloads and downloadable content (DLC), spending on subscriptions and mobile gaming. This assessment of the broader consumer spend on the industry utilizes NPD’s monthly POS tracking services as well as consumer data from other NPD trackers, monitors, and reports. *Accessory sales exclude game cards About Sensor Tower, Inc. Sensor Tower is the leading provider of market intelligence and insights for the global app economy. Founded in 2013 and based in San Francisco, CA, Sensor Tower provides enterprise-level data on mobile apps and publishers through our Store Intelligence, Ad Intelligence, Usage Intelligence, and App Intelligence platforms, which offer download, revenue, share of voice, and engagement metrics at unparalleled accuracy for the world’s most important markets. For more information, visit sensortower.com. Follow us on Twitter: @sensortower.

The 2022/2023 school year will be the first since the start of the pandemic where parents and students have certainty about going back to school for the duration of the traditional back-to-school shopping season. However, there are new factors that weren’t part of the equation in 2019 or even in 2021, which will result in a newly elongated and fragmented shopping landscape for this annual retail event – one that will emerge over three semesters of spending. Essentials First Students have been in school for the better part of the past school year so the excitement of going back is not as great as it was last year. Consumers are also busier and more distracted by social engagements this summer. Only 26% of U.S. consumers had started their back-to-school shopping as of mid-July and16% said it wasn’t even on their minds yet. Couple the emotional timing elements with the elevated cost of just about everything and the priority purchases will be uniforms, laptops, and other items needed for the school year. This prioritization was evident over the week of Prime Day and other retailer promotions, when school supplies, footwear, and apparel did not get the same lift as other categories. Supplies and Dorm Set-up Second More than half of U.S. consumers are planning to start their back-to-school shopping this year in August. The majority of consumers who are holding off on back-to-school shopping are waiting for sales (41%), while others are waiting for school lists or the start of school to see what is needed. This wave is when students and parents will begin shopping for pens, pencils, notebooks, backpacks, and other the less specific and easier-to-find school needs. Others will be outfitting college dorms with things like bedding, air purifiers, and storage bins. Refining Personal Style Comes Third Shopping for fall clothing to wear in a classroom is low on the list of things to do during the summer months. when the focus is on vacations and fun. Once students are back in school with their peers, they will have a better sense of the personal style they want to feature through their apparel and footwear. At this point, swimwear and shorts are on their way out and the fall season is on the nearby horizon, putting those fall looks more top of mind. Manufacturers and retailers need to be prepared for consumer spending that will hit different categories at various times over the coming weeks and months. Consumers are still shopping in the moment, but now their eyes are focused on finding good deals. Get insights straight to your inbox #Backtoschool