Co-op, Boots and JD Sports are the most resilient retail brands, outperforming the wider UK category which experienced a combined valuation decline of 17%, according to the latest Kantar BrandZ Most Valuable UK Brands 2023 report.
The Co-op brand is now worth $1.8 billion, down slightly by 2% on last year, with the retailer climbing four places to number 37. Boots gained five places with a valuation of $1.2 billion while JD Sports’ brand valuation dipped by 3% to $0.9 billion, taking it to 62nd in the ranking.
Tesco was the only retail brand to make the top ten this year, while Next was the only non-FMCG retailer in the top 30.
Adele Jolliffe, head of brand consultants at Kantar Insights UK, comments: “It’s been a very tough few years for retail. The accelerated shift to online has put pressure on business models, while the cost of living crisis has ignited the battle for share of wallet as consumers rein in their spending. However, there are still opportunities to find growth in a challenging market and brand is one of the most powerful tools in retailers’ arsenal – giving shoppers a reason to buy rather than to cut. What businesses like Co-op, Boots and JD Sports do especially well is knowing what they represent for consumers and fiercely protecting that identity and reputation. At the same time, they’re flexible and creative enough to adapt to changing habits and attitudes.
“Next is a good example of a brand that has evolved in line with shopper behaviour but also stayed true to the essence of who it is and what it stands for. For example, it has maximised its store estate for click and collect orders, benefiting from last mile efficiencies while providing the seamless purchase experience its customers want and like – and for which it is widely known.”
Collectively, the UK’s leading 75 brands are now worth $242 billion, a fall of 14% year on year which is largely in line with the annual global trend which shows a fall of 20%. However, in contrast, the most valuable global brands have increased their value by 39% since 2020. For the UK, the figure is just 6%.
Jolliffe comments: “The UK’s year-on-year performance may paint a similar picture to the global trend but if we dig a little deeper into the numbers, the UK is lagging in the medium term. UK brands are falling behind their global peers and the few success stories are an exception to the rule.”
Kantar’s analysis shows that UK brands are failing to set themselves apart from the competition. Adele Jolliffe expands: “Of the eight markets we analysed, UK brands are right at the bottom for how differentiated consumers perceive them to be. We have some incredibly well-known names in this country and they come to mind easily for people, but being familiar isn’t enough to get consumers to put their hands in their pockets and pay the prices brands need to sustain healthy margins.”
The findings demonstrate the risks for brands who don’t distinguish themselves, most notably Wilko which collapsed into administration in August. Wilko was known for offering value but in terms of those crucial points of difference for shoppers, it was 13th in its competitive set, losing out to rivals such as B&M.
Jolliffe continues: “Our data shows that brand – and brand difference especially – is one of the most important factors in justifying pricing. Brands like M&S Food are particularly good at this. It has one of the strongest pricing power scores in its sector thanks to a consistent focus on shaping its reputation as a retailer with a difference: ‘This is not just food, this is M&S Food’ is a powerful brand statement that gets into the psyche of consumers. Ultimately, the future retail success stories will be the brands who understand the link between pricing and brand building, and who use it to their advantage to drive profitability.”
