Aldi overtakes Tesco as the most valuable global retail brand

shutterstock_108870446In the tenth annual BrandZ Top 100 Most Valuable Global Retail Brands ranking, released today by WPP and Millward Brown, discount retailers showed that they are winning the loyalty as well as purses of shoppers. Aldi shot up the ranking with a 22% increase in brand value and is now at no.8 with a value of $11.7bn. Lidl (no.20), was up 27% to $6.0bn.

Advertising that focuses on promoting quality produce that is equal to the major multiples has helped the discounters’ value proposition. The major supermarkets no longer dominate the retail ranking.

Tesco, the only major UK supermarket that makes it into the global ranking, saw its brand value decline by -37% to $9.4bn on the back of challenging trading conditions which impacted profits as the retail sector undergoes a radical technology-driven transformation. Other global retailers also saw declines – Carrefour declined by 12% to $8bn while Whole Foods declined by -24% to just over $7bn.

Alison Casey, senior client director for retail at Millward Brown said: “The discounters provide a great customer experience; they are relevant to cost-conscious shoppers with everyday low pricing and their smaller-sized store shopping format is more suited to today’s ‘small and often’ shopper. Importantly, they have also articulated and clearly communicated what they stand for. Delivering on the brand promise is a critical component of success for all major brands and it’s helping the discounters to build engagement, trust and loyalty with customers.

“The battle for consumer loyalty for the major supermarkets and discounters will not be won on price, but on creating meaningful and differentiated brands.”

The BrandZ Top 20 Most Valuable Retail Brands 2015

Rank 2015

Brand

Brand value 2015 ($M)

Brand value change

Rank 2014

Rank in global Top 100

1

Alibaba

66,375

N/A

New

13

2

Amazon

62,292

-3%

1

14

3

Walmart

35,245

0%

2

26

4

The Home Depot

27,705

25%

3

31

5

Ikea

17,025

-12%

4

64

6

eBay

14,171

-9%

5

73

7

Woolworths

11,818

-1%

7

87

8

Aldi

11,660

22%

8

90

9

Costco

11,214

19%

9

97

10

Lowe’s

10,756

23%

13

11

CVS

10,280

21%

14

12

Tesco

9,410

-37%

6

13

Walgreens

8,484

2%

15

14

Target

8,400

-11%

10

15

Carrefour

8,000

-12%

12

16

JD.com

7,649

N/A

New

17

7-eleven

7,492

N/A

New

18

Macys

7,103

N/A

New

19

Whole Foods

7,009

-24%

11

20

Lidl

6, 031

27%

19

Other highlights in the global retail ranking included:

The most valuable retail brands lack physical stores. Chinese e-tailer Alibaba shot into the top spot of the retail ranking after its IPO, overtaking Amazon (no.2 worth $62.3bn) and adding its $66.4bn brand value to the sector. Retail is now one of the fastest growth categories alongside technology. Both brands are more valuable than Walmart, which is no.3 in the retail ranking with a brand value of $35.2bn and has 11,000 stores worldwide.

Consumer cry for convenience. Saving shoppers’ time and adopting a ‘shopper-first’ attitude continues to boost retail brand values. Supermarkets such as Walmart (no.3) and 7-Eleven (a new entrant at no.17) capitalised on this with small format stores whereas Macy’s department store (no.18) also played to this trend as a one stop shop. Amazon (no.2) experimented in New York with a one-hour delivery service called PrimeNow.

Two new brands from China. In addition to no.1 brand Alibaba, JD.com, a Chinese e-commerce site that processed 689 million orders in 2014 entered the ranking. The ability of Chinese brands to build brands overseas as well as at home is a common theme across many categories in this year’s ranking. According to The Economist Intelligence Unit, China is expected to overtake the US as the world’s largest overall retail market within five years.