McKinsey European consumer sentiment survey: How current events in Europe are shaping consumer behavior

1. McKinsey & Company 1 The invasion of Ukraine in February 2022 has had deep human, as well as social and economic impact, across countries and sectors. The implications of the invasion of Ukraine are also rapidly evolving and inherently uncertain. As a result, this document and the data and analysis it sets out should be treated as a best-efforts perspective at a specific point of time, which seeks to help inform discussion and decisions taken by leaders of relevant organizations. The document does not set out economic or geopolitical forecasts and should not be treated as doing so. It also does not provide legal analysis, including but not limited to legal advice on sanctions or export control issues.

2. McKinsey & Company 2 Three emerging consumer themes in April 2022 New sources of concern and tumbling confidence in overall economy Sharply rising prices on essentials with noticeable consequences on spend Noticeable activity, demand and channel and brand shifts in search for value for money Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 1 2 3 How do consumers feel? What do consumer observe? How are consumers reacting? Despite the pandemic’s continuing grip on societies in Europe, rising prices and invasion of Ukraine have now by far overtaken COVID-19 as top concerns for consumers Rising prices are particularly worrying for low- income consumers and millennials Pessimism about economic recovery has significantly increased in the last months, climbing to higher levels than during COVID-19 lockdown periods and more than doubling when compared with October 2021 A vast majority of respondents across countries has observed price increases More than 90% perceive a high increase in grocery prices Consumer tangibly see and feel sharply increasing prices on food, petrol and other essentials, and they expects prices to increase even further. As a consequence, consumers have started to cut back on spend in other (discretionary) categories and are expecting to continue to do so going forward 68% of consumers have changed shopping behavior in response to concerns and pressures faced Downtrading is widespread, and more than half of those having changed shopping behavior are testing private labels Consumers are increasing purchases in discounters, for which prices/promotions and value for money are major drivers Less than half of consumers have returned to pre-COVID-19 out-of-home routine activities

3. McKinsey & Company 3 Despite the pandemic’s continuing grip on societies in Europe, rising prices and invasion of Ukraine have now eclipsed COVID-19 as top concerns for consumers (1/2) Germany UK Italy France2 Spain Top source of concern1 % of respondents 1. Q: Which of the following is your top concern today? Figures may not sum to 100%, due to rounding. 2. For France, political insecurity (9%) and immigration (8%) are concerns mentioned by more than 5% of consumers. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 12 5 7 8 24 44 Europe 5 9 21 11 9 8 7 8 3 6 3 2 4 4 11 14 8 6 7 11 7 34 18 15 32 21 40 44 60 32 47 Rising prices Invasion of Ukraine COVID-19 pandemic Unemployment/job security Extreme weather events Other

4. McKinsey & Company 4 Despite the pandemic’s continuing grip on societies in Europe, rising prices and invasion of Ukraine have now eclipsed COVID-19 as top concerns for consumers (2/2) 80 59 41 29 28 20 19 17 5 3 Rising prices Invasion of Ukraine Extreme weather events/climate change COVID-19 pandemic Unemployment/job security Political uncertainty Cost/accessibility of healthcare Immigration Brexit Other 1. Q: What are the greatest source(s) of concern for you right now? Please select the top 3. 2. Q: Which of the following is your top concern today? Top sources of concern today % of respondents 44 24 8 5 7 3 3 4 1 1 Among top 3 sources of concern1 Top source of concern2 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

5. McKinsey & Company 5 Rising prices particularly worrying for low income and millennials, invasion of Ukraine for high income and baby boomers (1/2) 10 5 6 7 21 39 Overall Top source of concern1 % of respondents 1. Q: Which of the following is your top concern today? Figures may not sum to 100%, due to rounding. 9 10 11 5 6 9 5 7 6 7 15 23 27 44 39 32 4 4 Low income High income Middle income Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 9 10 10 10 6 5 9 8 7 9 6 6 8 16 16 22 27 39 43 39 36 Baby boomers 4 Gen Z Millennials 4 Gen X 3 Split by generation Split by income Other Rising prices Invasion of Ukraine COVID-19 pandemic Extreme weather events Unemployment/job security

6. McKinsey & Company 6 Rising prices particularly worrying for low income and millennials, invasion of Ukraine for high income and baby boomers (2/2) Top 3 sources of concern1 % of respondents 1. Q: What are the greatest source(s) of concern for you right now? Please select the top 3. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 44 24 8 5 7 3 3 4 1 1 Extreme weather events/climate change Unemployment/job security Rising prices Cost/accessibility of healthcare Invasion of Ukraine Immigration COVID-19 pandemic Political uncertainty Brexit Other High income Middle income Low income Gen Z Millennials Gen X Baby boomers 49 17 8 4 10 3 3 3 0 1 45 26 7 5 5 4 2 4 1 1 37 31 8 7 5 3 3 5 1 1 44 18 10 7 10 5 2 1 1 1 49 18 7 6 9 3 3 3 1 1 44 25 6 5 8 3 3 4 0 1 41 31 9 5 3 3 2 5 1 1 Split by generation Split by income

7. McKinsey & Company 7 Almost two out of three consumers are negative about their own country’s current economic state Confidence in own country’s current economic state1 % of respondents 55 58 61 63 67 32 29 24 26 22 13 13 15 11 11 Germany UK Italy France Spain 1. Q: How are you feeling about [COUNTRY]'s economy today? Rated from 1 “very positive” to 5 “very negative.” for visualization, we merged the categories “very positive” and “positive,” as well as “very negative” and ”negative.” Figures may not sum to 100%, due to rounding. 2. Calculated by subtracting all "negative" answers from all "positive" answers. Net confidence2 −42 −56 −52 −45 −46 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 61 27 13 Positive Neutral Negative Europe 5 −48

8. McKinsey & Company 8 Low-income and elder consumers have the lowest confidence in their own country’s economic recovery 61 27 13 Positive Overall Negative Neutral Confidence in own country’s current economic state1 % of respondents 1. Q: How are you feeling about [COUNTRY]'s economy today? Rated from 1 “very positive” to 5 “very negative.” For visualization, we merged the categories “very positive” and “positive,” as well as “very negative” and ”negative.” Figures may not sum to 100%, due to rounding. 2. Income brackets use € for France, Germany, Italy, Spain; for UK, the same brackets were used with £. 3. Baby boomers includes silent generation. 66 59 57 26 28 25 13 18 High (>50K) 9 Low (<25K) Middle (25K–50K) 54 58 63 64 29 27 26 26 17 15 Baby boomers3 11 Gen Z Millennials Gen X 10 By income2 By generation Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

9. McKinsey & Company 9 Consumers who are concerned about price increases and unemployment are the most pessimistic on the current economy 68 57 46 69 46 23 29 33 22 36 9 14 21 9 18 COVID-19 pandemic Rising prices Invasion of Ukraine Unemployment Extreme weather events Confidence in own country’s current economic state1 % of respondents overall and by top concerns 1. Q: How are you feeling about [COUNTRY]'s economy today? Rated from 1 “very positive” to 5 “very negative.” for visualization, we merged the categories “very positive” and “positive,” as well as “very negative” and ”negative.” Figures may not sum to 100%, due to rounding. 2. Calculated by subtracting all "negative/very negative" answers from all "positive/very positive" answers. Net confidence2 −29 −28 −60 −43 −25 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 61 27 13 Negative Overall Positive Neutral −48

10. McKinsey & Company 10 Supply-related risks are the greatest worries of consumers with a negative outlook on the current economy Germany UK Italy France Spain Top 3 reasons for negative view on economy1 % of respondents who indicated a negative view of the economy’s current status and/or outlook 1. Q: You mentioned that you are feeling negatively about [COUNTRY]’s economy in light of the Ukraine invasion. Which of the following topics are you most uncertain about? Please select up to 3. Figures may not sum to 100%, due to rounding; Bars only show reasons with agreement >20%. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 47 42 39 31 27 26 24 16 12 9 3 0 Impact of influx of refugees Interruption of gasoline supply Unemployment rates/job security Supply chain shortages Energy shortages Risk of further escalation of the war Rising interest rates Food shortages Risk of nuclear disaster Uncertainty on the stock market Restrictions on international travel Other 41 50 53 33 19 22 14 23 14 8 2 1 45 44 36 29 22 33 20 17 12 10 3 1 53 40 43 30 19 31 33 12 11 7 3 0 49 32 41 29 37 20 23 15 13 11 3 0 46 44 24 34 39 24 28 11 12 10 2 0 Europe 5

11. McKinsey & Company 11 30 30 32 30 31 31 24 17 25 37 52 55 53 55 54 53 55 49 51 49 18 15 15 15 14 16 21 34 24 14 Mar 2020 Apr 2020 May 2020 Feb 2021 June 2020 Oct 2021 Nov 2020 Mar 2022 Apr 20223 Sept 2020 Optimistic: The economy will rebound within 2–3 months and grow just as strong as or stronger than before the current crisis Neutral: The economy will be impacted for 6–12 months or longer and will stagnate or show slow growth thereafter Pessimistic: The current crisis will have lasting impact on the economy and show regression or fall into lengthy recession 1. Q: What is your overall confidence level surrounding economic conditions after the coronavirus (COVID-19) crisis subsides (ie, once there is herd immunity)? Rated from 1 “very optimistic” to 6 “very pessimistic”; Top, middle, and bottom 2 boxes of scale aggregated to "Optimistic," “Neutral,“ and "Pessimistic.“ Figures may not sum to 100%, because of rounding. 2. Average of biweekly pulse surveys shown for Mar–May 2020. 3. Question in Apr 2022 was not framed for coronavirus: What is your overall confidence level surrounding the potential economic impact related to the invasion of Ukraine that began in Feb 2022? Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK); 3/22–3/29/2022, n = 5,028 (France, Germany, Italy, Spain, UK); 10/15–10/22/2021, n = 5,081 (France, Germany, Italy, Spain, UK); 2/23–2/27/2021, n = 5,139 (France, Germany, Italy, Spain, UK); 11/9–11/16/2020, n = 5,232; 9/24–9/27/2020, n = 5,338 (France, Germany, Italy, Spain, UK); 6/18–6/21/2020, n = 5,645; 5/21–5/24/2020, n = 5,641; 4/30– 5/03/2020, n = 5,631; 4/16–4/19/2020, n = 5,623; 4/2–4/5/2020, n = 5,645, 3/26–3/29/2020, n = 5,614; 3/20–3/23/2020, n = 5,035 (Italy, France, Germany, Spain, UK, Portugal), sampled to match European general population 18+ years Overall pessimism about economic recovery has significantly increased, climbing to higher levels than during COVID-19 crisis Confidence in own country’s economic recovery after crisis,1 % of respondents 20202 2021 2022

12. McKinsey & Company 12 Confidence in own country’s economic recovery after current crisis,1 Apr 12–18, 2022 % of respondents 33 35 35 38 42 52 51 49 50 44 14 14 16 12 14 Pessimism about economic recovery is high across countries and more than doubled since October 2021 1. Q: What is your overall confidence level surrounding the potential economic impact related to the invasion of Ukraine that began in Feb 2022? Rated from 1 “very optimistic” to 6 “very pessimistic.” Top, middle, and bottom 2 boxes of scale aggregated to "Optimistic," “Neutral," and "Pessimistic.“ Figures may not sum to 100%, due to rounding. Change in % pessimistic vs Oct 2021 survey, percentage points Change in % optimistic vs Oct 2021 survey, percentage points UK +18 −17 Italy +25 −23 Spain +24 −19 Germany +19 −23 France +13 −19 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years Optimistic: The economy will rebound within 2–3 months and grow just as strong as or stronger than before the current crisis Neutral: The economy will be impacted for 6–12 months or longer and will stagnate or show slow growth thereafter Pessimistic: The current crisis will have lasting impact on the economy and show regression or fall into lengthy recession

13. McKinsey & Company 13 Low-income and elder consumers are having lowest confidence in their own country’s forward-looking economic recovery 37 49 14 Overall Pessimistic Neutral Optimistic Confidence in own country’s expected economic recovery after current crisis1 % of respondents 1. Q: What is your overall confidence level surrounding the potential economic impact related to the invasion of Ukraine that began in Feb 2022? Rated from 1 “very optimistic” to 6 “very pessimistic.” Top, middle, and bottom 2 boxes of scale aggregated to "Optimistic," “Neutral," and "Pessimistic.“ Figures may not sum to 100%, due to rounding. 2. Income brackets use € for France, Germany, Italy, Spain; for UK, same brackets were used with £. 3. Baby boomers includes silent generation. 41 35 33 48 51 49 15 18 11 Low (<25K) Middle (25K–50K) High (>50K) 22 34 41 40 57 49 46 50 20 18 13 Gen X Gen Z Millennials 10 Baby boomers3 By income2 By generation Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

15. McKinsey & Company 15 Across countries, the vast majority of respondents observed price changes Germany UK Italy France Spain 1. Q: In the last 4–6 weeks, have you seen a general change in the prices of any goods you commonly buy? Price changes perceived in last 4–6 weeks1 % of respondents Year-over-year inflation, Mar 2022, % 7.6 5.1 7.0 6.8 9.8 7 93 11 89 12 88 10 90 94 6 Source: OECD; McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 9 91 No Yes Europe 5

16. McKinsey & Company 16 By far the most respondents perceive price increases in groceries and food for home 1. Q: In the last 4–6 weeks, have you seen a general increase in the prices of any goods you commonly buy? 2. Q: In the last 4–6 weeks, how have you observed prices changing across the following categories? Rated from 1 "Prices decreased" to 5 "Prices increased significantly." 3. Calculated by subtracting all "decreased" answers from all "increased/significantly increased" answers. Stayed the same Decreased Increased Increased significantly Not sure Price changes perceived in last 4–6 weeks General price change1 % of respondents Price change by category2 % of respondents who shopped category 9 91 Yes No Net change3 92 69 69 67 66 55 54 51 49 49 46 45 43 42 40 32 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 2 1 1 2 1 1 1 1 2 2 2 2 2 3 2 2 3 21 23 17 25 26 30 30 32 28 28 32 33 40 33 37 34 48 44 36 48 37 40 37 35 34 33 32 31 31 28 21 60 22 26 33 19 19 16 16 15 17 15 15 13 14 14 13 7 6 12 7 16 13 16 16 19 22 20 20 13 23 27 Household supplies Home decoration and furniture 1 Home improvement and gardening supplies Groceries/food for home Skin care and makeup Pet food and supplies Kitchen and dining products Personal-care products Sports and outdoors equipment, supplies Footwear Consumer electronics Fitness and wellness services Apparel Accessories Jewelry Vitamins, supplements, and OTC medicine

17. McKinsey & Company 17 Two-thirds of consumers surveyed are concerned about rising prices and expect prices to further increase over the next 12 months 65 63 47 36 13 I believe prices will continue to rise throughout the next 12 months I am concerned that the prices of everyday purchases have been increasing I am planning to buy fewer products/ services in the future if prices continue to rise I intend to use more “buy now, pay later” services in the coming months I have had to scale back my lifestyle due to an increase in prices 57 66 68 66 53 62 65 66 35 41 38 31 42 51 50 44 14 19 13 Statements Millennials Gen X Gen Z Baby boomers3 Generational cut Agreement to price-related statements % of respondents rating agreement as 5 or 6 on 6-point scale Between −3 and +3 < −3 > +3 Difference vs all consumers,2 percentage points 1. Q: Please read the following statements and indicate your level of agreement with each. Rated from 1 "Strongly disagree" to 6 "Strongly agree“. 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here split by generation. 3. Baby boomers includes silent generation. All consumers 8 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

18. McKinsey & Company 18 As spend on essential products rises, consumers save less and spend less on nonfood discretionary items—and expect further cuts 1. Q: How have your household finances been affected over the past 4–6 weeks? Rated from 1 "Reduced a lot" to 5 "Increased a lot.“ For visualization, we merged “increased a lot” and “increased,” as well as “reduced a lot” and “reduced.” "Last 4–6 weeks" refers to the change in behavior vs before the invasion of Ukraine. 2. Q: How do you expect your spend on the following categories to change in the next 4–6 weeks? Rated from 1 "Will spend significantly less" to 5 "Will spend significantly more.“ For visualization, we merged “significantly more” and “more,” as well as “significantly less” and “less.” "Next 4–6 weeks" refers to the plan consumers make today, so this change is incremental to past change. 3. Calculated by subtracting all "lower" answers from all "higher" answer in each column/time frame. Change of spend and expected spend in general categories % of respondents 8 14 20 15 33 50 73 24 21 30 41 40 19 62 59 55 27 10 Rent/ mortgage Energy/ utilities Transport and gasoline Food and essentials Nonfood discretionary Put money into savings Net change3 10 −6 39 47 38 −40 7 −16 30 38 26 −34 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years About the same Higher Lower 11 17 23 18 40 46 72 28 28 35 37 41 17 55 49 48 24 13 Rent/ mortgage Energy/ utilities Transport and gasoline Food and essentials Nonfood discretionary Put money into savings Change in spend in the last 4–6 weeks1 Expected change in spend in the next 4–6 weeks2

19. McKinsey & Company 19 Majorities of consumers report spend increases and expect further increases in energy, transport and gasoline, and food 1. Q: How have your household finances been affected over the past 4–6 weeks? Rated from 1 "Reduced a lot" to 5 "Increased a lot.“ For visualization, we merged “increased a lot” and “increased,” as well as “reduced a lot” and “reduced.” "Last 4–6 weeks" refers to the change in behavior vs before the invasion of Ukraine. 2. Q: How do you expect your spend on the following categories to change in the next 4–6 weeks? Rated from 1 "Will spend significantly less" to 5 "Will spend significantly more.“ For visualization, we merged “significantly more” and “more,” as well as “significantly less” and “less.” "Next 4–6 weeks" refers to the plan consumers make today, so this change is incremental to past change. 3. Calculated by adding the blue highlighted cells, ie, increased past spend or expect to increase future spend, excluding consumers that have decreased or expect to decrease their spend. Change of spend in general categories in last 4–6 weeks1 and expected in next 4–6 weeks,2 % of respondents Calculation example Observed/expected price increase,³ % 23 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years Decrease No change Increase Decrease 4 3 1 No change 4 63 6 Increase 2 7 10 Change of spend in next 4–6 weeks, % Change in spend in last 4–6 weeks, % Germany UK Italy France Spain 25 66 62 69 34 19 21 55 55 53 25 9 31 76 60 62 26 9 15 62 50 41 23 10 21 53 50 52 25 10 Energy/utilities Transport and gasoline Food and essentials Nonfood discretionary Put money into savings Rent/mortgage Europe 5 23 62 55 55 27 12 Between −3 and +3 < −3 > +3 Difference from all consumers,2 percentage points Observed/expected price increase,³ %

20. McKinsey & Company 20 Spending on food and gasoline increased sharply and is expected to grow further, while other categories are showing declines 10 20 37 36 42 42 41 41 54 51 33 18 14 32 45 39 37 27 44 17 17 12 13 18 9 11 9 8 13 15 13 10 10 12 14 21 Restaurant Home improvement, garden Food takeout and delivery Groceries Tobacco products Skin care and makeup Alcohol Apparel Accessories Quick-service restaurant Home and furniture Footwear Jewelry Toys and baby supplies Household supplies Personal-care products Sports and outdoors Kitchen and dining Decrease Increase Stay the same 12 25 16 36 37 45 27 30 33 16 23 41 29 40 39 44 46 43 18 14 10 7 13 12 13 14 11 60 29 14 35 17 15 18 14 16 Books/magazines/newspapers Entertainment at home Out-of-home entertainment Pet food and supplies Fitness and wellness Vitamins and OTC medicine Pet care services Consumer electronics Personal-care services Gasoline Vehicles Short-term home rentals Travel by car Cruises Adventures and tours International flights Hotel/resort stays Domestic flights −5 −29 −25 −33 −13 −15 −22 45 −27 7 −23 −25 −26 −32 −11 5 23 −10 −28 −27 −32 −25 −35 −30 −48 −44 −27 −9 −5 −24 −39 −32 −27 −14 Net change expected,3 next 4–6 weeks 6 0 −18 −12 −29 −34 −26 −16 −18 −23 29 −6 −29 2 −13 −20 −24 −29 −27 −25 Net change3 −46 34 −20 −3 −35 −3 −20 −25 −29 −25 −32 −30 −43 0 −22 −27 −24 −6 Change of spend in categories in last 4–6 weeks1 and expected in next 4–6 weeks2 % of respondents who shopped category Change, last 4–6 weeks Net change expected,3 next 4–6 weeks Net change3 Change, last 4–6 weeks 1. Q: In the past 4–6 weeks, how has the amount you have spent on these categories changed? Choices include “Spent less on this category,” “Spent the same amount,” “spent more on this category.” 2. Q: Over the next 4–6 weeks, do you expect that you will spend more, about the same, or less money on these categories than usual? 3. Net change is calculated by subtracting the % of respondents stating they decreased spend from the % of respondents stating they increased spend in the category. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years Net change > +15 Net change −15 to +15 Net change < −15 xx xx xx

21. McKinsey & Company 21 More than half of European consumers surveyed, especially baby boomers, are more conscious about their home energy usage Change in purchase behavior in last 4–6 weeks1 % of respondents 1. Q: In which other areas of your life, if any, have you changed your shopping behavior in the last 4–6 weeks? 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here generational cut. 3. Baby boomers includes silent generation. Between −3 and +3 < −3 > +3 Difference from all consumers,2 percentage points Source: McKinsey & Company Europe Consumer Pulse Survey, 04/12–04/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK); sampled to match European general population 18+ years 55 25 20 17 13 13 12 7 7 6 5 4 4 18 I have become more conscious about my home energy usage I have changed my mode of transport to use less gasoline/to save money I have delayed/canceled a pending trip/vacation I have reduced/stopped purchasing products from companies that have not taken a stance on the invasion of Ukraine I have purchased supplies to donate to the Ukraine humanitarian effort and/or have donated money or time to volunteer I have stocked up on products (e.g., grocery or household items) that I use often in the event that there are supply chain shortages I have delayed/canceled a planned purchase of a car/other vehicle I have reduced/stopped purchasing products from Russian companies I have started/increased my purchase of products from companies that have taken a stance on the invasion of Ukraine I have delayed/canceled a planned purchase of a new home I have sold/plan to sell my car or other vehicle I have sped up my plan to purchase a new home I have offered to shelter/sponsor Ukrainian refugees None of these Generational cut Millennials Gen X Gen Z Baby boomers3 31 26 23 25 48 53 53 62 20 20 16 16 10 10 5 2 10 6 4 1 12 13 15 11 9 6 4 2 13 12 13 15 8 8 6 6 8 8 6 5 20 21 21 19 13 14 11 12 8 5 4 2 11 15 19 21 All consumers

23. McKinsey & Company 23 v Two-thirds of consumers changed shopping behavior; a plurality of them have tried or plan to try private label 68 37 29 24 14 13 11 10 10 Try a new digital shopping method (eg, ordered groceries via app) Try a private-label brand Switch from a brick-and-mortar store to online Switch to a different brand than normal Shop from a different website than normal Shop from a different retailer/store than normal Use a new shopping method (eg, pickup and food delivery subscription) Switch from online to a brick-and-mortar store Activities in last 4–6 weeks1 % of respondents Plans to do activities in next 4–6 weeks2 % of respondents who did not do activity in the last 4–6 weeks 1. Q: In the last 4–6 weeks, which of the following have you done when purchasing groceries and other essentials (eg, toiletries, cleaning products)? 2. Q: How likely are you to change your shopping behavior in the next 4–6 weeks when purchasing groceries and other essentials (eg, toiletries, cleaning products)? Rated from 1 "Not likely at all" to 6 "Extremely likely." Here, the answers "Extremely likely" and "Likely" are shown in an aggregated view. 3. Any new shopping behavior applies if a respondent has chosen at least 1 of the other categories mentioned. Activities when shopping for groceries or essentials 38 21 13 10 9 8 8 7 14 Activities 94% of consumers noticed a price increase when shopping for groceries and essentials Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years Total: Any new shopping behavior3

24. McKinsey & Company 24 68 37 29 24 14 13 11 10 10 Shop from a different website than normal Switch from a brick-and-mortar store to online Switch to a different brand than normal Try a private-label brand Total: Any new shopping behavior3 Shop from a different retailer/store than normal Try a new digital shopping method Use a new shopping method Switch from online to a brick-and-mortar store For groceries and essentials, Gen Z and millennials were much more likely than older consumers to explore new shopping behaviors Generational cut All consumers Between −3 and +3 < −3 > +3 1. Q: In the last 4–6 weeks, which of the following have you done when purchasing groceries and other essentials (eg, toiletries, cleaning products)? 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here generational cut. 3. Any new shopping behavior applies if a respondent has chosen at least one of the other categories mentioned. Activities when shopping for groceries and essentials in the last 4–6 weeks1 % of respondents Difference vs all consumers,2 percentage points Gen Z Millennials Gen X Baby boomers 87 79 67 54 31 30 23 17 23 21 11 6 40 37 29 20 42 40 38 32 22 18 13 9 16 13 8 6 20 16 8 4 22 17 8 4 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

25. McKinsey & Company 25 Many consumers increased their purchases in discounters; many shopped less in convenience and specialty stores and hypermarkets Amount of shopping by retail format in past 4–6 weeks1 % of respondents who shopped at a different retailer/store than normal in last 4–6 weeks Retail format 11 4 36 25 23 16 24 29 33 35 38 56 29 33 34 35 16 7 9 8 Discounter Supermarket Hypermarket Specialty grocery store Convenience store Did not shop there Shopped more Shopped less Shopped same amount 1. Q: You mentioned that in the last 4–6 weeks you started shopping from a different retailer or store than you normally would when purchasing groceries and other essentials. How has your shopping at the following types of retailers/stores changed? 2. Calculated by subtracting all "shopped less" answers from all "shopped more" answers. 24% of consumers changed their retailer/store in the last 4–6 weeks Net change2 −22 −8 19 −24 −27 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

26. McKinsey & Company 26 German consumers shifted heavily to discounters, while only Italian consumers increased purchases from supermarkets Germany UK Italy France Spain 19 -8 -22 -24 -27 Supermarket Discounter Hypermarket Specialty grocery store Convenience store Net change Channels All consumers Between −3 and +3 < −3 > +3 Difference vs all consumers,2 percentage points 41 22 41 18 45 2 −4 −12 −24 43 27 −15 27 25 24 41 28 45 43 −27 27 25 −32 4 22 −9 −25 −26 −29 37 32 37 32 −21 −20 −16 −25 26 −28 −25 26 −16 −30 −29 Net change in shopping by retail formats, past 4–6 weeks1 % of respondents who shopped at a different retailer/store than normal 24% of consumers changed their retailer/store in the last 4–6 weeks Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 1. Q: You mentioned that in the last 4–6 weeks you started shopping from a different retailer or store than you normally would when purchasing groceries and other essentials. How has your shopping at the following types of retailers/stores changed? Net change calculated by subtracting all "shopped less" answers from all "shopped more" answers. 2. Difference calculated by subtracting the answers of all consumers from those in a subgroup—here split per country.

27. McKinsey & Company 27 Consumers’ top reasons for moving to a new retailer are prices/ promotions and value for money, particularly in the United Kingdom and Italy 1. Q: You mentioned you shopped from a different retailer/store in the past 4–6 weeks when purchasing groceries and other essentials (eg, toiletries, cleaning products). What were the main reasons you decided to try this new retailer/store? Respondents could choose up to 3 reasons. 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here split per country. All consumers Top reasons for choice of new retailer/store for groceries/essentials1 % of respondents who shopped at a different retailer/store than normal in last 4–6 weeks 46 42 21 19 16 15 14 14 13 10 8 8 8 7 7 6 5 3 Less crowded has shorter lines Better quality More easily accessible from my home Better prices/promotions Better value for money Offers natural/organic offerings I wanted to save on the cost of gasoline Products are in stock Supporting local businesses Family/friend recommendations Wanted variety/a change from normal One-stop shop Wanted to treat myself Shares my values More sustainable/environmentally friendly Cleaner/has better hygiene measures The company treats its employees well Their response to the invasion of Ukraine Between −2 and +2 < −2 > +2 Difference vs Europe 5,2 percentage points 24% of consumers changed their retailer/store in the last 4–6 weeks Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 38 35 18 21 17 21 13 8 12 13 14 7 10 8 3 5 11 8 Germany 56 55 15 12 14 17 12 8 14 9 9 8 5 4 6 4 7 5 UK 50 38 23 22 17 6 13 15 12 9 8 6 9 11 5 2 7 7 Italy 44 39 21 21 17 15 16 13 10 8 4 16 7 6 5 4 8 7 France 39 41 27 22 14 15 15 24 15 8 5 7 8 7 7 2 4 5 Spain

28. McKinsey & Company 28 Across generations, better prices/promotions and better value for money consistently are key reasons for switching retailers 1. Q: You mentioned you shopped from a different retailer/store in the past 4–6 weeks when purchasing groceries and other essentials (e.g., toiletries, cleaning products, etc.).What were the main reasons you decided to try this new retailer/store? Respondents could choose up to 3 reasons. 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here generational split. Top reasons for choice of new retailer/store for groceries/essentials1 % of respondents who shopped from a different retailer/store than normal in last 4–6 weeks 46 42 21 19 16 15 14 14 13 10 8 8 8 7 7 6 5 3 Products are in stock More easily accessible from my home Better prices/promotions Less crowded/has shorter lines Better value for money Shares my values Better quality I wanted to save on the cost of gasoline Supporting local businesses Family/friend recommendations Wanted variety/a change from normal One-stop shop Wanted to treat myself Offers natural/organic offerings More sustainable/environmentally friendly Their response to the invasion of Ukraine Cleaner/has better hygiene measures The company treats its employees well Between −2 and +2 < −2 > +2 Difference vs all consumers,2 percentage points 18 46 39 5 20 14 8 21 13 6 10 9 8 9 3 14 8 17 Millennials 16 50 42 4 17 12 8 20 12 4 5 7 8 8 3 16 8 10 Gen X 13 36 41 10 28 12 12 15 16 8 10 9 13 13 6 15 5 14 Gen Z 11 49 46 8 15 16 7 26 15 4 7 3 5 10 3 18 6 11 Baby boomers Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years All consumers 24% of consumers changed their retailer/store in the last 4–6 weeks

29. McKinsey & Company 29 Downtrading is particularly evident in household products, snacks and confectionary, and frozen foods 25 31 34 38 40 40 43 43 44 44 51 5 5 5 6 5 7 5 5 6 8 5 69 63 61 56 55 53 52 51 49 48 43 Hot drinks Household products Snacks and confectionary Bread and bakery Frozen foods Non-alcoholic beverages Dairy and eggs Healthcare, beauty, baby Fresh fruit and vegetables Fresh meat, fish, poultry Alcohol No change Switched to higher-priced brand Switched to lower-cost or private-label brand 1. Q: You mentioned that in the last 4–6 weeks you tried a different brand than you normally would when purchasing groceries and other essentials. Which of the following best describes how/where you switched brands? 2. Calculated by subtracting the answers for "switched to higher-priced brand" and "no change“ from "switched to lower-cost or private-label brand." Brand-switching behavior of consumers1 % of respondents who switched to a different brand for groceries or essentials in last 4–6 weeks Net trade-down2 39 27 21 11 9 6 3 3 −1 −5 −13 51% of consumers changed a groceries/essentials brand in the last 4–6 weeks Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

30. McKinsey & Company 30 Consumers in Germany and the United Kingdom are downtrading more than other countries in additional categories, including non-alcoholic beverages; healthcare, beauty, and baby; and bread and bakery Healthcare, beauty, and baby 6 Non-alcoholic beverages Frozen foods 27 Household products Alcohol Snacks and confectionary Dairy and eggs 21 Hot drinks Bread and bakery Fresh meat, fish, poultry Fresh fruit and vegetables 39 11 9 3 3 −1 −5 −13 Germany UK Italy France Spain 26 44 28 4 11 23 17 15 7 12 −12 −13 14 -7 30 8 −18 3 -6 -5 −13 −20 19 40 23 48 8 41 12 24 13 7 −13 13 −3 4 0 39 22 26 −6 5 −7 −12 35 3 −3 12 30 13 5 10 −17 −12 −11 1. Q: You mentioned that in the last 4–6 weeks you tried a different brand than you normally would when purchasing groceries and other essentials. Which of the following best describes how/where you switched brands? 2. Calculated by subtracting the answers for "switched to higher-priced brand" and "no change“ from "switched to lower-cost or private-label brand." Net trade-down2 Brand-switching behavior of consumers1 % of respondents who switched to a different brand for groceries or essentials in last 4–6 weeks 51% of consumers changed a groceries/essentials brand in the last 4–6 weeks Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

31. McKinsey & Company 31 Across generations, better prices/promotions and better value for money consistently are key reasons for switching brands 1. Q: You mentioned you tried a new/different brand than what you normally buy in the last 4–6 weeks when purchasing groceries and other essentials (eg, toiletries, cleaning products). What were the main reasons that drove this decision? Respondents could choose up to 3 reasons. 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here generational split. Top reasons for choice of new brand for groceries/essentials1 % of respondents who bought a different brand than normal in last 4–6 weeks Between −2 and +2 < −2 > +2 Difference vs all consumers,2 percentage points Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years All consumers 52 51 14 12 12 12 11 10 10 9 9 8 6 6 6 4 3 3 The company treats its employees well Larger package sizes Wanted to try a new brand I found Better value for money Wanted to try new type of product Better prices/promotions Products are in stock Cleaner/safer Is natural/organic Better quality Available where I’m shopping Supporting local businesses More sustainable/environmentally friendly Wanted to treat myself Better shipping/delivery cost Wanted variety/a change from normal Shares my values Their response to the invasion of Ukraine 4 5 2 3 15 10 12 11 56 44 40 57 59 47 40 57 8 8 4 3 19 20 8 10 8 10 9 12 8 11 6 3 10 11 13 13 3 8 3 1 12 10 7 8 13 12 9 8 7 5 3 2 9 15 6 4 11 12 6 9 9 12 9 13 6 10 4 6 12 13 10 13 Millennials Gen X Gen Z Baby boomers2 51% of consumers changed a groceries/ essentials brand in the last 4–6 weeks

32. McKinsey & Company 32 When observing price increases, more than half of consumers change behavior; about 20 percent say they delay the purchase Perception of price increase and action taken by consumers by category 1. Q: In the last 4–6 weeks, how have you observed prices changing across the following categories? Rated from 1 "Prices decreased significantly" to 5 "Prices increased significantly." 2. Q: In the last 4–6 weeks, have you done any of the following when purchasing [product]? Respondents who answered they switched to a different or lower-cost brand, delayed their purchase, switched to a different store or website, purchased a smaller quantity. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years No action Delayed a purchase Switched to a different brand Switched to a higher-cost brand Switched to a lower-cost brand Switched to a different store/website Purchased a larger size/quantity Purchased a smaller size/quantity 70 69 57 56 53 51 51 48 47 44 44 42 34 Vitamins, supplements, and OTC medicine Kitchen & dining products Pet food & supplies Apparel Home improvement & gardening supplies Skincare & make-up Consumer electronics Home decoration & furniture Sports & outdoors equipment & supplies Footwear Fitness & wellness services Accessories Jewelry 41 32 35 35 35 47 34 41 32 40 39 38 32 7 15 21 15 16 18 22 20 22 18 22 20 20 13 15 8 14 13 11 10 10 15 12 14 13 13 3 4 3 4 4 4 4 6 4 6 4 8 4 22 38 20 29 24 16 22 21 22 18 21 21 15 10 7 9 7 8 10 9 9 12 12 12 12 13 15 11 6 7 10 5 3 5 8 4 7 5 9 14 24 25 22 23 17 26 20 22 15 21 24 28 Consumer-observed price increases by category1 % of respondents top-2-boxes Changed behavior when price increase perceived2 % of respondents reacting to perceived price increase

33. McKinsey & Company 33 Across categories, majorities of consumers switching brands are moving to private labels Type of brand selected (private label or not)2 % of respondents choosing a different or lower-cost brand as reaction to a perceived price increase Switch to lower-cost or different brand % of respondents reacting to a perceived price increase 91 69 72 71 76 79 69 68 79 72 62 77 63 9 31 28 29 24 21 31 32 21 28 38 23 37 1. Q: In the last 4–6 weeks, have you done any of the following when purchasing [product]? Respondents who answered they switched to a different or lower-cost brand, delayed their purchase, switched to a different store or website, purchased a smaller quantity, none of these. 2. Q: You mentioned that you switched to a different brand when purchasing [product]. Was this a private-label brand (eg, supermarket brand)? Consumers switching brands by product category1 % of respondents who perceived a price increase in category and switched to a different or lower cost brand in the last 4-6 weeks Private-label brand Non-private-label brand Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 53 43 37 37 36 35 34 33 31 29 28 28 28 Vitamins, supplements, and OTC medicine Apparel Kitchen and dining products Skin care and makeup Pet food and supplies Sports and outdoors equipment, supplies Fitness and wellness services Home decoration and furniture Accessories Footwear Jewelry Home improvement and gardening supplies Consumer electronics

34. McKinsey & Company 34 Relative to other countries surveyed, Spanish consumers are brand loyal in health and well-being, Germans in clothing and interior 53 43 37 37 36 35 34 33 31 29 28 28 28 Fitness and wellness services Pet food and supplies Skin care and makeup Home decoration and furniture Apparel Kitchen and dining products Sports and outdoors equipment, supplies Consumer electronics Vitamins, supplements, and OTC medicine Accessories Footwear Jewelry Home improvement and gardening supplies Germany UK Italy France Spain 45 50 37 42 31 45 39 32 26 28 25 25 33 52 44 32 28 38 23 28 40 31 29 22 28 25 37 41 45 45 33 33 49 17 32 30 33 29 25 40 34 37 43 37 38 31 41 42 32 28 41 30 57 43 34 35 40 38 34 29 25 25 35 23 24 Switch to lower-cost or different brand1 % of respondents reacting to perceived price increase Europe 5 Between −3 and +3 < −3 > +3 Difference from Europe 5,2 percentage points 1. Q: In the last 4–6 weeks, have you done any of the following when purchasing [product]? Data are for respondents who answered they switched to a different or lower-cost brand. 2. Calculated by subtracting the answers of all consumers from those in a subgroup—here split per country. Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

35. McKinsey & Company 35 Reasons for choosing a product/brand in the past 4–6 weeks1 % of respondents rating reason as 1 or 2 (unimportant) and 5 or 6 (important) on 6-point scale 1. Q: In the last 4–6 weeks, when choosing a product/brand to purchase, how important to your purchase decision were the following factors that may be attributed to the product or brand? Rated from 1 "Not important at all" to 6 "Extremely important." 2. Calculated by subtracting the unimportant (ratings of 1 or 2) value from the important (ratings of 5 or 6) value. Trying out a new brand is strongly driven by ‘rational’ reasons, especially lower price and availability Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years 21 28 27 29 41 35 58 51 36 49 42 28 21 Rational Beliefs Sustainability 13 14 18 18 20 5 6 12 6 10 24 27 29 No artificial ingredients/natural/GMO-free Recyclable products, packaging, or initiatives Small or neutral carbon footprint Sustainably sourced materials Fair trade practices Lower price Available in the store closest to me Locally sourced/locally owned Brand that I know and trust Brand that treats employees well Brand actively supporting the humanitarian effort in Ukraine Brand that has stopped doing business in Russia Brand that has made public statements in support of Ukraine Unimportant Important Net importance2 27 21 11 9 1 54 45 24 32 5 1 −8 43

36. McKinsey & Company 36 Reason for trying a new brand in the past 4–6 weeks1 Net importance rating2 1. Q: In the last 4–6 weeks, when choosing a product/brand to purchase, how important to your purchase decision were the following factors that may be attributed to the product or brand? Rated from 1 "Not important at all" to 6 "Extremely important." 2. Calculated by subtracting the unimportant (ratings of 1 or 2) value from the important (ratings of 5 or 6) value. Rational Beliefs Sustain- ability Consumers in Germany, Italy, and Spain place more value on sustainability; those in Spain also value a clear position on Ukraine Europe 5 27 21 11 9 1 54 45 24 43 32 5 1 -8 Locally sourced/locally owned No artificial ingredients/natural/GMO-free Lower price Recyclable products, packaging, or initiatives Small or neutral carbon footprint Sustainably sourced materials Fair trade practices Available in the store closest to me Brand that I know and trust Brand that treats employees well Brand that made public statements in support of Ukraine Brand that actively supports humanitarian effort in Ukraine Brand that has stopped doing business in Russia France Spain UK Italy Germany 34 22 14 12 9 54 49 21 40 29 -5 -13 0 29 16 7 2 -7 40 36 27 33 26 -13 -16 -22 6 14 2 -2 -6 63 47 1 40 27 9 11 -10 32 21 8 12 -4 44 36 31 40 32 5 -2 -3 35 33 22 22 12 66 57 40 60 48 23 17 11 Source: McKinsey & Company Europe Consumer Pulse Survey, 4/12–4/18/2022, n = 5,075 (France, Germany, Italy, Spain, UK), sampled to match European general population 18+ years

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