Qantas has fallen to the 41st position in an evaluation of the strength of Australian brands, primarily due to negative media coverage resulting from reputational issues. This is a significant decline from 2019 when the airline held the top position as the country’s strongest brand in a similar report. A recent Brand Finance report, ranking Australia’s 100 most valuable and strongest brands in 2024, revealed that Bunnings retained its position as the strongest brand for the third consecutive year, while Woolworths remained the most valuable brand, despite a 5% decrease in brand value.
The collective value of the top 100 brands increased by 2.5% to $199 billion, with 60 brands experiencing an increase in value, 36 witnessing declines, and four new brands entering the list. Brand value, defined as the present value of earnings directly associated with brand reputation, was assessed alongside brand strength, considering factors such as customer perceptions and market share.
The report highlighted Qantas’ substantial drop of 22 places in brand strength since the previous assessment, attributing it mainly to reputational issues resulting in negative media coverage. Qantas also saw a 7% decrease in brand value to $2.8 billion, despite climbing one spot to become the 17th most valuable brand, driven by increased revenue. In contrast, Jetstar ascended 20 places to become the 46th strongest brand, even though it experienced a 5% decline in brand value to $578 million, influenced by falling revenues from domestic flights amid inflationary pressures.
Bunnings, maintaining its position as Australia’s strongest brand, witnessed a 20% increase in brand value to $6.5 billion, coupled with a 3.7% growth in in-store sales. The company’s strategic investments in digital channels and enhancements to its website and phone applications contributed to strengthening its market position.
NRMA Insurance claimed the second-strongest brand position, rising seven spots and surpassing Woolworths, whose brand value decreased by 91% to $2 billion. The report noted the impact of the cost-of-living crisis on Woolworths, Coles, and Bunnings, all affected by a decline in real retail spending due to consumers tightening discretionary purchases amid rising living costs.
Despite a 5% decline in brand value to $15.4 billion, Woolworths retained its status as the most valuable brand. Telstra, Commonwealth Bank, and Coles followed as the top four most valuable Australian brands, maintaining their positions despite brand value declines. Woolworths’ commitment to enhancing customer experience, including a new app feature for better purchase tracking, contributed to its continued success. The report also highlighted the banking sector’s outperformance compared to the retail sector, with 10% year-on-year growth and eight out of 11 banking brands experiencing increases in brand value.
Mark Crowe, the managing director of Brand Finance Australia, emphasized the importance of strong brands during challenging economic times. He noted that robust brands play a crucial role in either growing or minimizing the loss of value, mitigating reputational risks, and providing reassurance to consumers facing cost-of-living pressures.
The report delved into the ranking of brands by value, revealing Woolworths, Telstra, Commonwealth Bank, and Coles as the top four most valuable Australian brands, maintaining their positions despite declines in brand value. Woolworths, with a brand value of $15.4 billion, defended its crown, even with a 5% decrease. Telstra secured the second position with a marginal 1% drop in brand value to $13 billion. Commonwealth Bank, in third place, experienced a 7% decline to $10.6 billion, and Coles saw a 9% decrease to $9.8 billion.
Interestingly, the banking sector outperformed the retail sector, with eight out of 11 banking brands posting increases in brand value. The sector achieved a noteworthy 10% year-on-year growth, surpassing the retail sector’s 2% growth.
The competitive landscape and challenges faced by major brands were highlighted, particularly in the context of a cost-of-living crisis impacting Woolworths, Coles, and Bunnings. These brands were adversely affected by a decline in real retail spending for three consecutive quarters, attributed to consumers tightening their discretionary purchases amid rising living costs.
Despite Woolworths facing a decline in brand value, the report commended the company for remaining committed to elevating customer experience. The introduction of a new app feature enabling better tracking of purchases was cited as an example of Woolworths’ efforts to enhance customer satisfaction and engagement.
As the Australian business landscape continues to evolve, with economic challenges and changing consumer behaviors, the insights provided by the Brand Finance report offer valuable perspectives on the resilience and adaptability of leading brands in navigating these dynamics.