It’s already the biggest supermarket in Australia – but now Woolworths has taken the crown as the country’s most valuable single brand, worth almost $13 billion.
And, in part, that was helped by China.
Woolworths Group, which also includes Big W and Dan Murphy’s, has an overall market capitalisation of $53 billion – which means the supermarket brand alone is worth almost a quarter of the entire company.
But Woolies is still a minnow compared to the globe’s largest brand. That gong goes to the Apple name which is now worth around a third of a trillion dollars.
Meanwhile other big retailers, such as FlightCentre and Myer, have had a bad year, as have big banks like NAB.
The ranking has been put together by British business valuation consultancy Brand Finance which every year looks at the worth of 3500 brands around the world.
Woolies’ brand worth rose 6.4 per cent in 2020, from $11.8 billion the year before to $12.6 billion, helping it to hold onto its number one spot. That put it a country mile ahead of second place Telstra, the brand value of which fell almost 20 per cent to $9.5 billion, almost $3 billion behind the grocer.
BEIJING’S ROLE IN BOOSTING SUPERMARKETS
The pandemic was a boon for the brands of supermarkets, said Brand Finance managing director Mark Crowe.
“Despite the precarious financial conditions created by the pandemic, the Australian retail sector has benefited considerably from the boom in spending on essential items such as food, medicine and other household goods,” he said.
But he had a warning.
“While strong Australian supermarket brands such as Woolworths and Coles have been instrumental in driving up this brand value, the sector is not void of vulnerability to disruption, especially from tech-led challengers.”
Rival Coles’ stocks also rose by 4.1 per cent to $7.8 billion which saw it leapfrog miner BHP into fourth place overall. IGA’s brand value shot up by 25 per cent.
Bizarrely, Beijing helped both brand grow, the report said. The supermarkets’ boosted their brands with customers, already growing due to the pandemic, when they stepped in and sold discounted lobsters from Aussie fisheries. That happened when China instigated an unofficial import ban, a consequence of Beijing’s wider trade dispute with Canberra.
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AUSSIE BRAND WINNERS AND LOSERS
It wasn’t just supermarkets – other retailers also saw their brands do well in the pandemic. Officeworks saw the biggest single jump in value of any Australian brand, rising 63 per cent as people hoarded office chairs and wireless keyboards.
Priceline, JB Hi Fi, Reece Australia and even struggling Target saw the overall worth of their names improve.
Not so David Jones and Myer, with the value of both dropping. And Flight Centre saw its brand sink by almost 60 per cent as borders closed. It went from 40th most valuable Aussie brand in 2019 to just 70th last year.
“While five banking brands remain in the top 10, all have suffered a drop in brand value, apart from Macquarie,” said the report.
They have been rocked not just by coronavirus-related economic downturns but also a series of financial scandals emanating from the recent Royal Commission into the industry.
“It has been a difficult year for Australian banks, who certainly have acclimatised to being closely scrutinised,” said Mr Crowe.
COMMBANK STRONGEST BRAND
Brand strength measures not just value but customer perception, marketing investment and overall reputation.
“Commonwealth Bank proves that being a strong brand is often the result of a balanced performance across the board rather than being outstanding in one particular feature,” the survey found.
Woolies was the fifth strongest brand, below Harvey Norman, but that was still an improvement on ninth the previous year. The NRMA, RACV, Coles and Bunnings also did well by this metric.
Rio Tinto fell out of the top 10 of most valuable Australian brands – its name and reputation battered by the company’s destruction of the sacred Juukan Gorge in Western Australia.
APPLE WORLD’S NUMBER ONE BRAND
Globally, Apple eclipsed Amazon and Google to regain the trophy of the world biggest brand. The tech firm is now worth U$263 billion (A$340 million), with the rise due to diversifying away from phones and watches and growing its Apple Music and Apple TV products.
Five of the top six global brands are in technology, including Microsoft and Facebook. Seven of the top 10 brands are from the US.
South Korea gets a look in with Samsung’s fifth position, while China has two entries at the top of the table. ICBC bank is the world’s eighth most valuable brand and messaging service WeChat is now in the top 10.
A number of Chinese brands are in the top 20. Ping An health insurance and the State Grid utility may not be well known outside China, but the sheer might of their domestic market has led their brand’s worth to soar.
Compared to these goliaths, Woolworths’ almost measly $12 billion value only just sees it sneak into the top 200 of worldwide brands. And that’s almost 100 positions below arch rival, Germany’s Aldi.