Tesco brand strong, but UK retailers behind global rivals
The value growth of the UK’s top retail brands is falling behind the leading global retail brands, according to the 2019 BrandZ Top 75 Most Valuable UK Brands ranking announced today by WPP and Kantar.
While the UK retailers in the Top 75 grew their combined value by 4% over the last year, their performance is significantly lower than that of the retail brands in the BrandZ Global Top 100, which grew by 25%.
It also represents a slowdown compared with the UK retailers’ 2018 value growth of 11%.
The retail sector dominates the UK Top 75 again this year, with 14 retail brands making the ranking: Tesco, Next, Asda, Sainsbury’s, Marks & Spencer, Morrisons, Ocado, Boots, Co-op, Very, Waitrose, John Lewis, WHSmith and littlewoods.com. Online-only players Ocado and Very grew the most – by 35% and 21% respectively.
Without them, the combined value of the UK’s top retail brands would have increased by just 2%.
Of the retailers in the Global Top 100, Amazon was the biggest hitter, increasing its value 52% to US$315.5 billion.
Highlights: The 2019 BrandZ Top 75 Most Valuable UK Brands shows:
- Tesco is the most valuable UK retail brand (no.7) worth $9.2 billion, followed by Next (no.22), Asda (no.23), Sainsbury’s (no.24) and Marks & Spencer (no.27).
- Ocado (no.34) grew its value fourth fastest of all the brands in the UK Top 75, rising 35% to $2.0bn.
- The total value of the brands in the UK Top 75 (in all sectors) fell by 3% over the last year.
- Outside retail, the other brands in 2019’s top 5 fastest risers are Deliveroo, (+54%; no.50; $1.4bn), Costa Coffee (+48%; no.47; $1.5bn), BrewDog (+40%; no.57; $1.2bn) and Innocent (+35%; no.51; $1.3bn).
- Among three newcomers to the Top 75 this year, WHSmith enters at no.68. Aston Martin (no.69) and Halifax (no.70) are the other two.
The BrandZ Top 10 most valuable UK retail brands 2019
|Rank 2019||Brand||Brand value 2019 (US$bn)||Brand value change||Rank 2018|
|27||Marks & Spencer||$2.5||-18%||22|
Note: BrandZ is the only brand valuation ranking that combines validated financial data with consumers’ opinions to calculate the value a brand contributes to the business that owns it.
UK retailers are facing a raft of pressures, many driven by the changing needs of consumers who have high expectations when it comes to convenience, range, speed of delivery and competitive pricing. As a consequence, a record number (net 2,481) of well-known names disappeared from the UK’s top 500 high streets in 2018, including Maplin, Toys R Us and Poundworld.
Other retailers, in particular fashion brands, are moving from high street sites to new shopping areas such as train stations, airports and malls that attract high footfall and charge lower rents and rates.
Some of the UK’s retail brands live off their fame, but are no longer distinctive or relevant to today’s consumer, according to Henry Heywood, Head of Brand at Kantar:
“The mantra here is that you cannot live off fame alone. Salience has kept brands buoyant, but without meaningful difference this is not sustainable; salience will drain away, along with value. To avoid losing more ground, retailers must reinvigorate themselves – invest in long-term brand building, by communicating to a less engaged, less loyal and more demanding consumer about why they are still relevant.”
BrandZ’s analysis also reveals the success of Irish brand Primark – not in the UK ranking –which has flourished on the high street, driven by its ability to create meaningful difference. Built around value-for-money fashion, the brand has developed a strong emotional connection with young shoppers online via celebrity influencers and other paid partnerships.
This year’s BrandZ UK Top 75 highlights that online players Ocado and Very are the main drivers of growth. Recognised by shoppers as innovative, dynamic and responsive, they have built strong emotional connections with consumers through their customer service, range and pricing – and, ultimately, are good at telling their story.
Heywood added: “While the death of the physical store is exaggerated, traditional retailers are having to reinvent themselves for a new generation of shoppers, connecting digital platforms and online experiences with the physical offline experience. But now with the advent of online to offline, such as the launch of the Amazon Clicks & Mortar initiative in Manchester, there will be additional pressure on an already beleaguered high street.”