E-commerce markets expanding rapidly

E-commerce sales as a percentage of total retail sales

0

2

4

6

8

2008 2009 2010 2011 2012

Percent

United States China

Sources: U.S. Census, www.100EC.com , Milken Institute.

20132012201120102009200820072006200520042003

40

30

20

10

0

-10

-20

Percent change, year ago

E-commerce sales rising at much faster pace

Sources: U.S. Census, Moody’s Analytics.

E-commerce

sales

All retail

sales

Source: PricewaterhouseCoopers.

Internet advertising revenue continues to grow

Annual revenue, 2003-2012

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$ billions

Unit labor costs rise moderately United States

Sources: Bureau of Labor Statistics, IHS Global Insight.

20122011201020092008200720062005200420032002

4

2

0

-2

-4

-6

Percent change, year ago

Energy prices have fallen, but still add to cost pressures West Texas Intermediate Crude

Sources: Commodity Research Bureau, IHS Global Insight.

20132012201120102009200820072006200520042003

160

140

120

100

80

60

40

20

0

US$ per barrel

Retail: prime rents surge in top markets

High street retail, 2012 Q4

Source: CBRE Research.

-10

-5

0

5

10

15

20

25

30

Washington D.C.

Hong Kong Paris New York LondonWestend

Munich Sydney Dublin

Percent change, year ago

Consumer spending recovery has been restrained U.S. real personal consumption expenditures

Sources: Bureau of Economic Analysis, IHS Global Insight.

20132012201120102009200820072006200520042003

6

4

2

0

-2

-4

Percent change, year ago

Consumers show signs of caution

University of Michigan Consumer Sentiment

Sources: Thomson Reuters/University of Michigan, ECONODAY.

20132012201120102009200820072006200520042003

110

100

90

80

70

60

50

Index 1966Q1= 100

With more cautious consumers comes slower growth in sales

Total retail sales, excluding motor vehicle and parts dealers

Sources: U.S. Census Bureau. Moody’s Analytics.

20132012201120102009200820072006200520042003

10

5

0

-5

-10

-15

Percent change, year ago

Auto sales are the brightest spot Light vehicle sales, United States

Sources: Bureau of Economic Analysis, IHS Global Insight.

20132012201120102009200820072006

18

16

14

12

10

8

Millions, SAAR

U.S. households reduce financial debt obligations

Debt service payments as a percentage of disposable income

Sources: Federal Reserve Board, Moody’s Analytics.

12100806040200

12

10

8

6

4

Percent

Mortgage debt

Consumer debt

Source: Federal Reserve.

-10

-5

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Change, percent

U.S. consumer credit increases from 2009 low

Outstanding credit extended to household and personal expenditures

U.S. shows better retail sales

Retail sales by region, constant prices

Sources: Eurostat, Office for National Statistics (ONS), U.K., U.S. Bureau of Economic Analysis, Datastream, Milken Institute.

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013

Percent change, year ago

U.S.U.K.

Euro Area

Global middle class: Present and future

Middle class consumer spending

Middle class: all those living in households with daily per capita incomes between $10 and $100, adjusted for local purchasing power.

Source: Morgan Stanley Smith Barney.

EU30%

U.S.21%

Japan8%

China4%

India2%

Other Asia9%

Rest of the world

26%

2009

EU14%

U.S.7%

Japan4%

China18%

India23%

Other Asia14%

Rest of the world

20%

2030

Source: OECD.

India and China make waves in the global middle class

Share of global middle-class consumption, 2000-2050

Source: OECD.

Spending by global middle class will nearly triple by 2030

0

10

20

30

40

50

60

2009 2020 2030

US$ billions

“The consumer is not a moron.

She is your wife.”

---- David Ogilvy