Woolworths’ $12 billion secret weapon in shopping wars
Woolworths has regained the title of Australia's most valuable brand after knocking off reigning champion Telstra.
Brand Finance Australia has ranked Australia's top 100 brands and after a 5 per cent uplift in value, Woolworths has come out on top.
The supermarket chain has a value of $A11.8 billion which has also seen it placed in the top 250 companies on the Global 500 list.
This was significantly higher than fellow supermarket brand Coles which came in at number 5 with a value of $7.5 billion.
This represented a slight increase of 0.2 per cent for Coles and was considered a positive result considering its demerger with Wesfarmers last year.
Woolworths coming out as number one did not come as a surprise to the director of DGC Advisory retail analyst Geoff Dart.
"I am not at all surprised, it is very consistent with rankings that just look at finance as well as Roy Morgan's consumer sentiment report where Woolworths comes in at number three," he told news.com.au.
Mr Dart said Woolworth's value was in its consistency, consumers could trust it to be in stock and have a wider range than competitors.
"Woolworths is also the only brand making a conscious effort to provide consumers with healthier options and that is very deliberate," he said.
The supermarket's recent Discovery Garden promotion was proof of that, said Mr Dart.
The Discovery Garden promotion allowed consumers who spent money in store to collect a seedling kit which would allow them to grow their own fresh herbs, vegetables and flowers.
Even recent ideas to use overripe bananas to reduce food waste were all ways of encouraging healthy sustainable practices.
"Other competitors are doing plastic gimmicks for a mass market but Woolworths came out with the seedling kit which is phenomenal," said Mr Dart.
Even the recent controversies around the brand regarding staff pay would not have a big impact on the business.
It was recently uncovered that Woolworth's had underpaid nearly 6000 salaried team members over nine years, amounting to $300 million.
However, Mr Dart said the supermarket's immediate response to the issue would see consumers forgive them.
"Consumers are forgiving if retailers are honest and Woolworths came out straight away and said 'sorry and we will rectify this mistake'," he said.
The managing director of Brand Finance Australia, Mark Crowe, disagreed and said Woolworths had to handle the scandal delicately if it wanted to remain number one.
"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," said Mr Crowe.
It is only just ahead of Telstra as well, who suffered a 20.4 per cent drop in value but still held a value of $11.6 million.
Woolworths chief marketing officer Andrew Hicks said that Woolworths had a very deliberate strategy for the last 12 months and that would continue into 2020.
"We're a purpose-led brand and have been committed to bringing that purpose to life. We believe that it's more about what we do than what we say," said Mr Hicks.
"In the last 12 months we have continued our focus on meeting the changing needs of our customers while also engaging the community in a variety of meaningful ways."
AUSTRALIAN TOP BRANDS
With the exception of BHP and RioTinto, consumer focused brands took out the remaining spots on the top 10 list.
All four of Australia's major banks suffered a decrease in value but were able to maintain spots in the top 10 list.
This is despite the sector's ongoing public scandals and ongoing Royal Commission fallout that saw all banks lose brand value.
Commonwealth Bank was the highest valued bank on $10.2 billion following a 3.2 per cent decrease meanwhile, ANZ had the biggest decrease of 25.7 per cent for a value of $6.7 billion.
NAB took out the sixth spot, ahead of ANZ, with a value of $6.9 billion while Westpac was the lowest ranked bank at number 8, a position it also held last year.
"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," said Mr Crowe.
Mining companies BHP and RioTinto both had increases to place them in the top ten at positions 4 and 9 respectively.
Optus lost its number 9 spot falling to number 10 with a value of $4.7 billion but had the country's strongest brand and knocked last year's stronger brand Qantas off the podium, according to Mr Crowe.
"Optus' solid reputation for excellent customer service and value for money, is reflected in the one million new postpaid customers that subscribed in the last year," he said.