Woolworths most valuable brand in Australia, retail surges during COVID
Retail has overtaken banking to become Australia’s most valuable sector in terms of brand value, holding 25% of the total brand value calculated in Brand Finance Australia’s 100 ranking for 2021.
The growth in the sector was led by Australia’s most valuable brand for the second year running; Woolworths, and close competitor Coles.
The two supermarket giants grew brand value by 6% to A$12.6 billion and 4% to $7.9 billion respectively, each performing strongly in a year where many other industries were hit hard by the coronavirus pandemic.
Of the 17 retail brands in the Brand Finance Australia 100 2021 ranking, 11 remained steady or recorded growth in value. Others to grow are Reece Australia (up 14% to $901 million), Target (up 18% to $667 million), and Priceline (up 16% to US$350 million).
Brand Finance Australia 100 [click to enlarge]
The only other two brands with a AAA rating were Optus (86.3/100) and NRMA (82.7/100).
Brand Finance Australia managing director Mark Crowe said: “Despite the precarious financial conditions created by the pandemic, the Australian retail sector has benefitted considerably from the boom in spending on essential items such as food, medicine, and other household goods.
“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.”
The banking sector suffered an 11% overall drop amid weaker forecasts and lower interest rates. Five banking brands in the top 10 suffered a fall in brand value, with only Macquarie Bank maintaining its value of $3.5 billion, climbing back into the top 10 in the process.
Crowe said banks should look to invest to improve customer sentiment after years of scrutiny.
“It has been a difficult year for Australian banks, who certainly have acclimatised to being closely scrutinised over the last few years. With forecasts and a difficult economic situation ahead, banks will need to invest to sustain their improvement in customer sentiment, which will ultimately help drive future revenues,” he said.
Six of the 10 fastest falling brands globally were aerospace and airline brands, and this was unsurprisingly reflected in Australia, with Qantas (down 29% to $2.2 billion), Jetstar (down 23% to $503 million), and Virgin Australia (down 14% to $484 million).
All leisure and tourism brands on the Brand Finance Australia 100 2021 ranking have also dropped in brand value this year, with Flight Centre and The Staras the nation’s fastest-falling brands.
Other highlights from the ranker include Officeworks becoming the fastest-growing Australian brand, with 63% growth to $476 million, with its success attributed significantly to more Australians working from home during the pandemic.
The only mining brand in the top 10, BHP, dropped to fifth position as it experienced a 17% decrease in brand value to $7 billion.
Telcos had a tough year, with increased competition seeing Telstra (down 18%) and Optus (down 19%) both lose brand value. The report also put this down to a drop in forecast revenue and external economic factors.
World’s Most Valuable Brands [click to enlarge]
Globally, the battle of the tech giants raged on as Apple overtook both Amazon and Google to become the world’s most valuable brand. It’s the first time Apple has held the title since 2016, and its value increased by 80% to $367.7 billion thanks to the success of its diversification strategy.
Though it lost its number one position, it was still a healthy year of brand growth for Amazon, up 11% to $354.9 billion.
Brand Finance CEO David Haigh said: “With the onset of the pandemic, tech brands have experienced unprecedented demand for their products and services.
“At the same time, across sectors, brands which have pushed the boundaries of technological innovation have remained a cut above the rest, able to pivot their business to adapt to consumers’ changing needs. 2021 is the final call to get on board for all brands still stuck in the 20th century.”
When it came to the strongest brands globally, WeChat overtook Ferrari, with a BSI of 95.4/100.
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Zanda Wilson was a reporter and podcast producer at Mumbrella, specialising in radio reporting. He left Mumbrella in September 2021.
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