Woolworths slips in ranking of Australia’s most loved brands

IT’S been a tough few months for Woolworths. After posting a loss of more than $1 billion and closing down Masters, the company’s brand has slipped.

IT’S been a tough few months for Woolworths.

In August last year it posted a loss of more than $1 billion, it shutdown its Masters hardware stores and now the company’s brand — once Australia’s most loved — has slipped in the national rankings.

The supermarket giant lost its top spot in 2015 when it was knocked off by Telstra and has now fallen to fifth place.

At the same time its rival Coles has risen from eighth to just behind it in sixth place on the Brand Finance’s ranking of Australia’s top 100 brands.

Managing director Mark Crowe said Woolworths’ supermarket business was struggling to respond to the threat of German discounter Aldi.

“Like all retailers they’re exposed to tight margins, pressure in terms of cost especially in food, and of course they’ve got their main competitor in Coles having gone through a period of renewal, refreshing their brand very much in terms of their in-store experience,” Mr Crowe told news.com.au.

“Woolworths have dropped a lot in terms of a number of key customer metrics as well. That’s very much where a lot of their focus in investment will need to be, in the customer experience.”

At the time of the August results, Woolworths Group chief executive Brad Banducci said the top of his five priorities was “getting our customers to put us first and making the right business decisions to enable this to happen”.

“We are regaining competitiveness with improving customer metrics and sales and transaction growth demonstrating our customers are recognising our investment in lower prices, better service, fresh fruit and veg and improved store experience,” he said.

In November the company unveiled the first in its “next generation” of stores featuring overhauled fresh food sections and an increased health range.

Brand Finance ranks ASX-listed companies according to a range of metrics designed to measure what their brand would be worth in royalties if they were to license it to a third party.

“We look at the strength of the brand, business performance and future revenue forecast, and then we bring that back to present day value,” Mr Crowe said.

And the results offered a unique insight into how a company might perform in the future, he said, as opposed to profit and loss and balance sheets which gave a historical view.

“They should be worried and I’d say they are worried, and a lot of their effort at the moment in terms of management is looking at how they can turn the ship around,” he said.

A major issue for the Woolworths’ brand, he said, was a decline in loyalty as customers were now more likely to shop around.

“Woolworths once enjoyed very strong loyalty. I’d say that’s been broken, and often once you’ve allowed customers to look elsewhere, it’s extremely hard to grow that loyalty back again.”

Telstra was crowned the nation’s strongest brand for the second year in a row, while JB Hifi, Bunnings and Kmart experienced significant increases in brand value.

“I think what it highlights is you’re seeing a lot of businesses achieving success through very good, focused strategies really honing in on value for money,” Mr Crowe said.

“It’s not just purely competing on price it’s also competing very much in terms of service and understanding the customer.”

“Customers have responded well to our recent brand campaigns, and all of our key brand metrics are heading in the right direction,” a Woolworths spokesperson told news.com.au.

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