Australia 100 2021

The annual report on the most valuable and strongest Australian brands

Brand Finance Australia 100 2021

Australian Retail Sector Overtakes Banking to Become Most Valuable

  • Retail overtakes banking sector to become nation’s most valuable industry in ranking
  • Woolworths remains Australia’s most valuable brand for 2nd consecutive year, brand value AU$12.6 billion
  • All banking brands in top 10 suffer brand value drop but Macquarie remains steady
  • Officeworks is fastest growing, brand value up impressive 63%
  • Leisure & tourism and airline brands hit hard by COVID-19 pandemic, all brands lose value
  • Commonwealth Bank is nation’s strongest brand, with brand strength index (BSI) score of 85.6 out of 100

This year, the retail sector has overtaken banking in terms of overall brand value, accounting for 25% of total brand value in the Brand Finance Australia 100 2021 ranking.  

Supermarket brands such as most valuable, Woolworths (brand value up 6% to AU$12.6 billion) and competitor, Coles (up 4% to AU$7.9 billion), which is in 4th position, have been leading the charge by ensuring that grocery supply was not disrupted by COVID-19.

In contrast, the Australian banking sector has suffered an overall 11% drop in brand value due to weaker performance forecasts and unfavourable financial conditions caused by the COVID-19 pandemic. Of the 5 banking brands in the top 10, only Macquarie has managed to keep a steady brand value year-on-year, while Commonwealth Bank (down 11% to AU$9.1 billion), ANZ (down 5% to AU$6.4 billion), nab (down 20% to AU$5.5 billion), and Westpac (down 15% to AU$4.9 billion) have all suffered losses.

As increasing competition puts pressure on all telecoms brands, the value of the Telstra brand dropped by 18% to AU$9.5 billion, reaching its lowest point since 2014. The story is similar for Optus which decreased by 19% to AU$3.8 billion due to a drop in forecast revenue and external economic factors.

As the only mining brand in the top 10, BHP has dropped to 5th position this year following a 17% decrease in brand value to AU$7.0 billion. This is due to a greater economic risk across the market, which has impacted the discount rate applied to the valuation. Although revenue forecasts remained stable overall, a movement of revenues into less highly branded segments has reduced the royalty rate applied to the model, further reducing brand value.

The strongest brand this year is Commonwealth Bank, with a Brand Strength Index (BSI) score of 84.9 out of 100, followed by Optus and NRMA – the only other brands on the ranking with a AAA rating – who scored 86.3 and 82.7 out of 100, respectively.

Woolworths most valuable

Woolworths maintained its spot as the most valuable brand in Australia and the wider region of Oceania for the second year running, following a healthy brand value growth of 6% to AU$12.6 billion. Fellow supermarket brand and competitor, Coles, has also enjoyed a brand value boost, growing by 4% to AU$7.9 billion and climbing 1 spot in the Brand Finance Australia 100 2021 ranking.

Both supermarket brands played an important part in supporting the economy during a difficult year defined by the pandemic. Apart from continuing to provide food and other essential items to the people of Australia during lockdowns, the brands joined forces to help the country’s fishing industry when it was impacted by China’s live import ban, for instance, by selling lobsters at discounted rates.

As the region’s top performing brands by brand value growth, Woolworths and Coles have contributed to the overall 3% growth of the Australian retail sector, which has overtaken banking to become the country’s most valuable industry. Of the 17 retail brands in the Brand Finance Australia 100 2021 ranking, 11 have remained steady or recorded brand value growth, including Reece Australia (up 14% to AU$901 million), Target (up 18% to AU$667 million), and Priceline (up 16% to US$350 million), all of which provided essential food, medicine, and home goods to consumers throughout the pandemic.

Despite the precarious financial conditions created by the pandemic, the Australian retail sector has benefitted considerably from the boom in spending on essential items such as food, medicine, and other household goods. While strong Australian supermarket brands such as Woolworths and Coles have been instrumental in driving up this brand value, the sector is not void of vulnerability to disruption, especially from tech-led challengers.

Mark Crowe, Managing Director, Brand Finance Australia

Banking sector continues to falter

Australian banks continue to falter, as weaker performance forecasts and a less favourable economic outlook have taken their toll on the banking brands in the Brand Finance Australia 100 2021 ranking. Exacerbated by the dent in profits and lower interest rates set by central banks as a result of the pandemic, the banking sector has suffered an overall 11% drop in brand value and is no longer the most valuable industry in Australia.

While 5 banking brands remain in the top 10, all have suffered a drop in brand value, apart from Macquarie which has maintained its brand value of AU$3.5 billion and jumped one spot in the ranking, re-entering the top 10. The country’s leading banking brand, Commonwealth Bank has dropped by 11% to AU$9.1 billion, amid weaker performance forecasts that continue to plague the rest of the sector.

After two years of catastrophic brand value losses in 2019 and 2020 following the Royal Commission scandal, ANZ may be turning the tide on its misfortune, as its brand value only dropped by 5% to AU$6.4 billion this year. The brand has also managed to move up to 6th position due to the much more damaging drop experienced by its competitor, nab (down 20% to AU$5.5 billion). Nab’s brand value has been falling consistently, suffering a loss of over 20% for the second consecutive year primarily due to weakening forecasts that see revenue flatten over the next five years.

Westpac (down 15% to AU$4.9 billion) kept its position as the 8th most valuable brand despite suffering a brand value drop for the fifth consecutive year. This is unlikely to change in the year ahead due to pessimistic forecasts and detrimental economic conditions that plague the sector.

It has been a difficult year for Australian banks, who will certainly have acclimated to being closely scrutinised over the last few years. With bleak forecasts and a difficult economic situation ahead, banks will need to work hard in the coming year to gain favour amongst consumers.

Mark Crowe, Managing Director, Brand Finance Australia

Officeworks fastest growing

Retail brand, Officeworks, is this year’s fastest-growing Australian brand, recording an impressive 63% growth in brand value to AU$476 million. As the country’s largest supplier of office and stationary products, the brand’s increase was driven by improved revenue growth both online and in-store as more Australians turned to working and learning from home due to the pandemic.

Leisure & tourism and airline brands hit hard

A clear consequence of the COVID-19 pandemic, all leisure and tourism brands on the Brand Finance Australia 100 2021 ranking have dropped in brand value this year, with Flight Centre and The Star as the fastest-falling brands on the ranking.

Down by 58% to AU$406 million, Flight Centre has experienced the greatest decline in brand value this year due to the bleak prospects ahead for the global travel industry. With heavy restrictions on domestic and global travel predicted to last for most of the year, the travel agency’s forecasts for recovery remain uncertain. The story is similar for Australian casino operator, The Star (down 46% to AU$410 million), which was heavily impacted by disruptions to its operations due to COVID-19 and subsequently experienced a significant decline in financial performance.

In line with industry trends, Australian airlines brands have also taken a hit, namely Qantas (down 29% to AU$2.2 billion), Jetstar (down 23% to AU$503 million), and Virgin Australia (down 14% to AU$484 million). Few sectors have been as severely affected by the pandemic as the airlines industry, with surges in COVID-19 cases and border restrictions continuously prompting flight cancellations. While some airlines brands – such as Qantas – may try to hang on to their profits by offering low prices on domestic flights and taking part in the government’s repatriation scheme, the sector’s woes will only be solved by an effective global rollout of the vaccine in the year ahead.

Commonwealth Bank is nation’s strongest

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer perceptions, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value.

Despite the troubles faced by the banking sector, Commonwealth Bank is Australia’s strongest brand with a Brand Strength Index (BSI) score of 85.6 out of 100 and a corresponding AAA brand strength rating.

According to our Global Brand Equity Monitor research, Commonwealth Bank is a cut above the rest in terms of its sheer presence and ubiquity, outperforming other Australian banks in familiarity amongst consumers. The bank also scored higher than its peers for word-of-mouth incidence, which is paramount in this sector as personal recommendation is important. This, coupled with Commonwealth Bank’s strong reputation for product range, website, apps, and services puts the brand in a very strong position for the coming year. Commonwealth Bank proves that being a strong brand is often the result of a balanced performance across the board rather than being outstanding in one particular feature.

Telecoms brand, Optus, is the second strongest brand, with a BSI score of 84.9 out of 100 and a corresponding AAA brand strength rating. During this period where consumers are increasingly relying on digital connectivity, Optus’ sector-leading scores for customer service, availability, accessibility, website, and apps are indicative of a brand which is delivering on its promises. Nonetheless, Optus cannot rest on its laurels, as it is not especially innovative, and its value-for-money and customer advocacy scores could be much higher.

NRMA has increased in brand strength year-on-year to become the third strongest brand, with a BSI score of 84.6 out of 100. This is a significant achievement for the brand, which is one out of three brands to have been awarded an AAA impressive brand strength rating. NRMA’s advertising campaign following last summer’s record-breaking bushfires helped boost consumer perceptions of the brand, which ranked particularly high in quality, innovation, and value for money.

Boasting a BSI score of 81.7 out of 100, Bunnings is a notable mention, as it remains a firm favourite amongst Australian consumers with the highest reputation score of all brands measured in the country. Virtually every homeowner is familiar with the retail brand, demonstrated by its incredibly high consideration levels of 97% amongst those familiar with the brand.