Woolies named Australia’s most valuable brand despite underpayment scandal, dethroning Telstra

With a brand value of $11.8bn, Woolworths has overtaken Telstra to become Australia’s most valuable brand, in the face of an ongoing underpayment scandal involving 5,700 staff and totalling up to $300m. The supermarket giant topped the ranking despite staff satisfaction and corporate reputation being assessed as part of the process.

Telstra dropped to second place after four years on top of Brand Finance’s annual rankings, with its brand value dropping 20% to $11.7bn, while telco rival Optus was judged the country’s strongest brand according to its brand strength index, with a score of 86.3 out of 100.

“Woolworths is facing a difficult year ahead after the damaging investigation into staff’s 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,” acknowledged Mark Crowe, Brand Finance Australia’s managing director.

Crowe added that Telstra’s brand strength index score rose by 1.9 points, but the telco sector is facing significant challenges. Telstra’s slide can be chalked up to the NBN roll out, which significantly impacted the brand’s profits last year, falling steeply by 40%.

“The way in which we consume telecommunications has changed for good and all telecoms brands will have to adapt if they want to survive this shift in the sector,” he said.

Optus’ title as strongest brand and corresponding AAA brand strength rating meant Qantas was knocked off the podium, dropping 18% to $3.1bn.

Despite fallout from an explosive Royal Commission, Australia’s Big 4 banks all ranked within the top 10, with Commonwealth Bank the best-performing at third, followed by NAB (#6), ANZ (#7) and Westpac (#8). NAB and ANZ slid significantly from last year’s rankings, with their brand values falling 19.9% and 25.7%, respectively.

CommBank and Westpac held steady in terms of rankings, but Westpac’s brand value fell 21.2% to 5.7bn thanks to a money laundering scandal that emerged in November. Today, the embattled bank named its new chair in the wake of the 23m suspected breaches of anti-money laundering laws.

“Financial institutions are certainly familiar with being scrutinised closely and with the country’s banks feeling the heat following the Royal Commission, the spotlight will be closely on them as they try to rebuild and repair their damaged reputations. Australia’s banks all face the same brand challenge in the coming year, to restore trust, customer retention and satisfaction, and ultimately to rebuild their brand value.”

Brand Finance’s top 10 was rounded out by BHP, Coles, Rio Tinto and Optus. The world-leading brand valuation consultancy compiles the list by assessing marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. It values 5,000 of the world’s biggest brands annually, and determines brand value by calculating the net economic benefit a brand owner would achieve by licensing the brand in the open market. Brand strength is deemed the efficacy of a brand’s performance on intangible measures relative to its competitors.

Globally, seven Australian brands – led by Woolworths – featured in the worldwide list, which was topped by tech behemoths Amazon (crowned first for the third consecutive year, and breaking the US$200bn brand value mark), Google, Apple, Microsoft and Samsung.

However, Brand Finance recognised the criticism of Amazon, including environmental opposition, backlash from local retailers, and revelations that warehouse workers are treated like robots who feel they can’t go to the bathroom because it would mean not hitting their targets.

“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,” said Brand Finance’s CEO, David Haigh.

“Today, Amazon’s situation seems more than comfortable, but what will the roaring twenties hold in store?”


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