Table of Contents
Overview
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- What you need to know
- Areas covered in this Report
- What is a discounter?
Executive Summary
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- The market
- Market size and forecast
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- Figure 1: All discounters’ sector size (£m excluding VAT), 2011-21
- Low inflation holds down prices
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- Figure 2: Inflation rates compared to a year earlier, 2011-July 2016
- Companies, brands and innovation
- Food discounters dominate
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- Figure 3: Market shares of the leading discounters, 2015
- Advertising spend increases 31% in 2015
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- Figure 4: Recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading discounters, 2011-15
- Lidl and Aldi most trusted discounters
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- Figure 5: Attitudes towards and usage of selected brands, July 2016
- New non-food discounter
- The consumer
- Poundland the most visited discounter
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- Figure 6: Frequency of shopping at discounters, June 2016
- Fresh food the main purchase from food discounters
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- Figure 7: What they buy from food discounters, June 2016
- Food popular at the non-food discounters
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- Figure 8: What they buy from non-food discounters, June 2016
- Aldi customers more likely to be doing a main shop
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- Figure 9: How they shop at food discounters, June 2016
- Impulsiveness is central to shopping at non-food discounters
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- Figure 10: How they shop at non-food discounters, June 2016
- Discount shopping for pleasure
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- Figure 11: Attitudes towards shopping at discounters, June 2016
- What we think
Issues and Insights
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- Discount stores have shifted the perception of value
- The facts
- The implications
- Food discounters tackle ethical perceptions
- The facts
- The implications
- Will Steinhoff come to dominate non-food discounting?
- The facts
- The implications
The Market – What You Need to Know
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- Discount market growth slows
- Aldi and Lidl alone again
- Non-food discounting a dynamic sector
- Brexit boost for discounters?
- All food retailer’s sales flat
- Inflation holds down prices
Market Drivers
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- Consumer confidence
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- Figure 12: Consumers’ view on their current and future financial situation, January 2013-July 2016
- Food retailers’ sales
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- Figure 13: All food retailers’ sales, 2010-20
- Inflation
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- Figure 14: Inflation rates compared to a year earlier, 2011-July 2016
- Growth in convenience retail
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- Figure 15: Convenience store sector sales and forecast (including VAT), 2010-20
- Consumers lose faith in promotions
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- Figure 16: Attitudes towards grocers’ pricing, August 2015
Market Size and Forecast
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- Market size
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- Figure 17: Food and non-food discounters’ market size, 2011/12-2015/16
- The food discounters
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- Figure 18: Food discounters’ market size, 2011-2015/16
- The non-food discounters
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- Figure 19: Non-food discounters’ market size, 2011/12-2015/16
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- Figure 20: The leading non-food discounters’ revenue, 2011-15
- The forecast
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- Figure 21: All discounters’ sector size (£m excluding VAT), 2011-21
- Figure 22: Sales and forecast: All discounters, 2011-21
- Segmental analysis – Food discounters
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- Figure 23: Food discounters’ sector size (£m excluding VAT), 2011-21
- Figure 24: Sales and forecast: Food discounters, 2011-21
- Segmental analysis – Non-food discounters
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- Figure 25: Non-food discounters’ sector size (£m excluding VAT), 2011-21
- Figure 26: Sales and forecast: Non-food discounters, 2011-21
- The impact of the EU referendum vote
- Food discounters excelled following the recession
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- Figure 27: Alternative market scenarios for the post-Brexit food-discount market, at current prices, 2016-21
- Figure 28: Detailed post-Brexit scenarios for the food-discount sector, at current prices, 2016-21
- Uncertainty could lead to renewed focus on price
- A faster impact than before
- Forecast methodology
Companies and Brands – What You Need to Know
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- Food discounters dominate
- Wilko drops down the rankings
- New UK clothing, homewares and groceries discounter
- Advertising spend increases 31% in 2015
- Lidl and Aldi most trusted discounters
- Poundworld and Poundstretcher brands struggle
Key Players
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- Figure 29: Leading discounters’ sales, 2010/11-2015/16
- Figure 30: Leading discounters’ operating profits, 2010/11-2015/16
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- Figure 31: Leading discounters’ operating margins, 2010/11-2015/16
- Figure 32: Leading discounters’ outlet numbers, 2010/11-2015/16
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- Figure 33: Leading discounters’ sales per outlet, 2010/11-2015/16
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Innovation and Launch Activity
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- New UK clothing, homewares and groceries discounter
- Aldi pop-up wine shop
- Discount food shop which sells everyday essentials for just 10p
- EasyJet founder opens no-frills, discount food store
- Liquidation retail store
- Well-known bargain basement retailer back from the dead
- Aldi to challenge Ikea with budget furniture range
- Cash and carry brand to roll-out value-led fascia
Advertising and Marketing Activity
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- Total advertising spend by the sector’s leading retailers up 31.2% in 2015
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- Figure 34: Recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading discounters, 2011-15
- Lidl and Aldi accounted for 93.5% of total sector ad spend in 2015
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- Figure 35: Recorded above-the-line, online display and direct mail total advertising expenditure by leading UK discounters, 2011-15
- Advertising spend peaks around Easter and in the run-up to Christmas
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- Figure 36: Recorded above-the-line, online display and direct mail total advertising expenditure by leading discounters, by month, 2015
- TV grabs the lion’s share of adspend
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- Figure 37: Recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading discounters, by media type, 2011-15
- A note on adspend
Space Allocation Summary
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- Food discounters – Summary
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- Figure 38: Food discounters: Summary shelf frontage space allocation estimates, August 2016
- Food discounters – Detailed space allocation
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- Figure 39: Food discounters: Detailed shelf frontage space allocation estimates, August 2016
- Multi-price non-food discounters – Summary
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- Figure 40: Multi-price non-food discounters: Summary shelf frontage space allocation estimates, August 2016
- Multi-price non-food discounters – Detailed space allocation
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- Figure 41: Multi-price non-food discounters: Detailed shelf frontage space allocation estimates, August 2016
- Fixed-price non-food discounters – Summary
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- Figure 42: Fixed-price non-food discounters: Summary shelf frontage space allocation estimates, August 2016
- Fixed-price non-food discounters – Detailed space allocation
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- Figure 43: Fixed-price non-food discounters: Detailed shelf frontage space allocation estimates, August 2016
Retail Product Mix
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- Figure 44: Leading discounters: estimated sales by product, 2015
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- Figure 45: Leading discounters estimated sales mix, 2015
- Figure 46: Leading discounters, estimated sales per square metre, 2015
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Market Share
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- Market share of the discount sector
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- Figure 47: Market shares of the discount sector, 2013-15
- Market share of food-discounters
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- Figure 48: Market shares of the food discount sector, 2013-15
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- Figure 49: Markets shares in the food discount sector, 2006-15
- Market share of non-food discounters
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- Figure 50: Market shares of the non-food discount sector, 2013-15
Brand Research
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- Brand map
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- Figure 51: Attitudes towards and usage of selected brands, July 2016
- Key brand metrics
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- Figure 52: Key metrics for selected brands, July 2016
- Aldi and Lidl enjoy a reputation for innovation
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- Figure 53: Attitudes, by brand, July 2016
- Poundworld and Poundstretcher struggle to generate appeal
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- Figure 54: Brand personality – Macro image, July 2016
- Food discounters are changing perceptions
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- Figure 55: Brand personality – Micro image, July 2016
- Brand analysis
- Aldi still out in front when it comes to perception
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- Figure 56: User profile of Aldi, July 2016
- Lidl seen as more exciting and ethical than Aldi
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- Figure 57: User profile of Lidl, July 2016
- B&M offers a different kind of experience
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- Figure 58: User profile of B&M bargains, July 2016
- Poundland trades on its availability and accessibility
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- Figure 59: User profile of Poundland, July 2016
- Poundworld customers are unimpressed
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- Figure 60: User profile of Poundworld, July 2016
- Poundstretcher has little to offer
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- Figure 61: User profile of Poundstretcher, July 2016
Aldi Stores Ltd (UK & Ireland)
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- What we think
- Transformation
- Step change?
- Where next?
- Background
- Company performance
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- Figure 62: Aldi Stores Ltd (UK & Ireland): Group financial performance, 2010/11-2014/15
- Figure 63: Aldi Stores Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Lidl (UK)
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- What we think
- Background
- Company performance
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- Figure 64: Lidl (UK): Estimated group financial performance, 2010/11-2014/15
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- Figure 65: Lidl (UK): Outlet data, 2010/11-2014/15
- Retail offering
B&M Retail Ltd
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- What we think
- Background
- Company performance
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- Figure 66: B&M Retail Ltd: Group financial performance, 2010/11-2015/16
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- Figure 67: B&M Retail Ltd: Outlet data, 2010/11-2015/16
- Retail offering
TJ Morris Ltd (Home Bargains)
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- What we think
- Background
- Company performance
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- Figure 68: TJ Morris Ltd: Group financial performance, 2011/12-2015/16
- Figure 69: TJ Morris Ltd: Outlet data, 2011/12-2015/16
- Retail offering
Poundland Ltd
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- What we think
- Background
- Company performance
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- Figure 70: Poundland Ltd: Group financial performance, 2011/12-2015/16
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- Figure 71: Poundland Ltd: Outlet data, 2011/12-2015/16
- Retail offering
Poundstretcher
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- What we think
- Background
- Company performance
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- Figure 72: Poundstretcher: Group financial performance, 2010/11-2014/15
- Figure 73: Poundstretcher: Outlet data, 2010/11-2014/15
- Retail offering
Poundworld Retail Ltd
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- What we think
- A better performance
- Turning point
- Where next?
- Background
- Company performance
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- Figure 74: Poundworld Retail Ltd: Group financial performance, 2011/12-2015/16
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- Figure 75: Poundworld Retail Ltd: Outlet data, 2011/12-2015/16
- Retail offering
Wilko Retail Ltd (formerly Wilkinson Hardware Stores Ltd)
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- What we think
- Background
- Company performance
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- Figure 76: Wilko Retails Ltd: Group financial performance, 2011/12-2015/16
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- Figure 77: Wilko Retails Ltd: Outlet data, 2011/12-2015/16
- Retail offering
The Consumer – What You Need to Know
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- 83% have shopped at a discounter
- 60% of Asda main grocery shoppers visit Aldi
- Aldi attracts a higher level of spending
- Poundland attracts a lower average spend
- Food and drink most popular purchase
- Planned impulsivity
- Discounters match up on quality
Where They Shop
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- Poundland most visited discounter
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- Figure 78: Frequency of shopping at discounters, June 2016
- Frequency of shopping
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- Figure 79: How often those who shopped with each retailer in the past 3 months visited, June 2016
- Asda shares the largest proportion of its customers
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- Figure 80: Food discounter visited in the last three months, by supermarket where they spend the most on groceries, June 2016
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- Figure 81: Consumer attitudes towards retailers offering good value versus Asda quarterly LFL revenue, Q3 2012-Q2 2016
- Repertoire analysis
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- Figure 82: Repertoire analysis of shopping at discount retailers, June 2016
What They Spend
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- Food discounter spent the most with
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- Figure 83: Where they spend the most money (food discounters), June 2016
- Non-food discounter spent the most with
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- Figure 84: Where they spend the most (non-food discounters), June 2016
- Average spend
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- Figure 85: What they spend on an average shopping trip, June 2016
- 25-34-year-olds are the highest spenders at Aldi and Lidl
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- Figure 86: Average spend at the food discounters, by age and gender, June 2016
What They Buy
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- What they buy from food discounters
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- Figure 87: What they buy from food discounters, June 2016
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- Figure 88: What they buy from food discounters, by retailer, June 2016
- What they buy from non-food discounters
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- Figure 89: What they buy from non-food discounters, June 2016
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- Figure 90: What they buy from non-food discounters, by age and socio-economic group, June 2016
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- Figure 91: What they buy from non-food discounters, by retailer spent the most with, June 2016
How They Shop at Discounters
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- Figure 92: How they shop at food discounters, June 2016
- Lidl customers more likely to be used for pre-planned top-up shopping
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- Figure 93: How they shop at food discounters, by food discounter spent the most with, June 2016
- Special events attract younger and more affluent customers
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- Figure 94: How they shop at food discounters, by average age and affluence, June 2016
- Premium ranges and events most popular with Londoners
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- Figure 95: How they shop at food discounters, by region, June 2016
- How they shop at non-food discounters
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- Figure 96: How they shop at non-food discounters, June 2016
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- Figure 97: How they shop at non-food discounters, by retailer used, June 2016
- Brands and the discounters
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- Figure 98: How they shop at non-food discounters, by number of discounters used, June 2016
- The young like to shop and compare online
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- Figure 99: How they shop at non-food discounters, by age and affluence, June 2016
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Attitudes towards Shopping at Discounters
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- Figure 100: Attitudes towards shopping at discounters, June 2016
- Are they really that much cheaper?
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- Figure 101: Attitudes towards shopping at discounters, by age and gender, June 2016
- Speed and convenience
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- Figure 102: Attitudes towards shopping at discounters, by age and gender, June 2016
- Discount shopper attitudes towards quality
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- Figure 103: Attitudes towards shopping at discounters, by age and gender, June 2016
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Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Consumer research methodology
- VAT
- Financial definitions
- Abbreviations
Appendix – Market Size and Forecast
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- Forecast methodology
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