Australia’s biggest supermarket chain has been crowned the nation’s most valuable brand, while the world’s richest man Jeff Bezos’ Amazon topped the international list.
Woolworths deposed reigning champion Telstra to claim the national title, a new report on Australia’s top 100 brands by independent brand valuation consultancy Brand Finance revealed.
‘Brand value’ is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market.
In addition to measuring overall brand value, Brand Finance also evaluated the relative strength of brands based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation.
Australia’s most valuable brands
Supermarkets, banks, telco, and mining companies dominated Australia’s top 10 most valuable brands.
A 5 per cent uplift saw Woolworths take first place with a brand value of $11.8 billion.
Woolworths’ “brand strength” – a crucial driver of brand value – “enabled it to overcome a tough market, where retail activity is contracting, and economic growth forecasts are gloomy”, Brand Finance said.
The past year hasn’t been all smooth sailing for Woolworths, which commands around 34 per cent of Australia’s grocery market, with the company recently fessing up to underpaying staff by $300 million.
“We are witnessing a decreasingly optimistic market, where many of the country’s biggest consumer brands are suffering,” Brand Finance Australia managing director Mark Crowe said.
“Household names, Woolworths and Coles, are bucking the trend, supported by their long-standing position in the marketplace.”
Mr Crowe said Woolworths was facing “a difficult year ahead after the damaging investigation into staff pay”.
“How the brand responds in the coming year will be pivotal if it is to retain its title of the most valuable Australian brand,” he said.
Coles, which commands around 27 per cent of Australia’s grocery market, was ranked the nation’s fifth most valuable brand with a brand value of $7.5 billion.
Coles has “been feeling the pinch as shoppers are becoming increasingly careful with their spending habits”, Brand Finance said.
“However, its small brand value increase (up 0.2 per cent) is a very positive result following its demerger with Wesfarmers, the country’s largest ever demerger.”
Telstra claimed second place on the overall list, but saw its brand value plummet by more than 20 per cent to $11.7 billion.
“The NBN rollout has significantly affected the brand’s profits, which dropped 40 per cent in 2019, and the long-term economic outlook for the brand looks challenging,” Brand Finance said.
“Telstra is grappling with, along with the majority of key players globally, the rise in challengers in the Telco-OTT space, as well as rapidly diminishing margins as a result of fierce price competition.”
Telstra’s main rival Optus was ranked 10th, with its brand value down 11 per cent to $4.7 billion.
Following a bruising Royal Commission, Australia’s big banks watched their brand values plummet over the past year.
“Australian banks are facing turbulent times, as the delayed effects of the global economic slowdown are being felt across the country,” Brand Finance said.
“This, paired with the sector’s public scandals and the ongoing fallout from the Royal Commission, has created a less-than-favourable environment, resulting in all banking brands losing brand value this year.”
The country’s biggest lender, Commonwealth Bank, was ranked third. It lost 3 per cent of its brand value down to $10.2 billion.
NAB placed sixth, losing 19.9 per cent of its brand value for a total of $6.9 billion.
ANZ came in seventh, suffering a $2.3 billion loss in brand value for a total of $6.8 billion.
Westpac came in eighth, losing 21 per cent of its brand value for a total of $5.7 billion, after chief executive Brian Hartzer was forced to step down following revelations of millions of breaches of anti-money laundering laws.
Mining brands climbed up the rankings, despite growing public concern around fossil fuels driving climate change
BHP rose from sixth in 2019 to fourth in 2020 with a brand value of $8.4 billion, while Rio Tinto rose from 10th spot to ninth with a brand value of $4.8 billion.
“Both brands are negotiating the increasing intolerance of new mining projects, among the Australian public and internationally; a strong brand becomes increasingly important in keeping other influential stakeholders, such as regulators, on side to maintain growth and profitability” Brand Finance said.
The world’s most valuable brands
Brand Finance’s Global 500 list was dominated by tech brands.
Online retail behemoth Amazon cemented its dominance, retaining the No.1 spot as the world’s most valuable brand for the third consecutive year.
Amazon smashed the $US200 billion brand value barrier, with its value rising 17.5 per cent from $US187.9 billion to $US220.8 billion.
“The disrupter of the entire retail ecosystem, the brand that boasts the highest brand value ever, Amazon continues to impress across imperishable consumer truths: value, convenience, and choice,” Brand Finance chief executive David Haigh said.
“Today, Amazon’s situation seems more than comfortable, but what will the roaring twenties hold in store?”
Google edged Apple out of the No.2 spot, with 11.9 per cent growth for a brand value of $US159.7 billion.
Apple fell to third, with its brand value declining 8.5 per cent to $US140.5 billion.