Tuesday 23 January 2018

Aldi's brand overtakes Tesco for the first time

Bottles of Aldi, own-brand soft drinks are on display outside an Aldi discount grocery store in Germany. Photo: Sean Gallup/Getty Images
Bottles of Aldi, own-brand soft drinks are on display outside an Aldi discount grocery store in Germany. Photo: Sean Gallup/Getty Images

Lauren Davidson

The value of Aldi's brand has surpassed that of Tesco's for the first time, according to an influential ranking, after a difficult year for the supermarket giant.

Tesco's brand value declined by 37pc to $9.4m, from $14.8m last year, reflecting consumers' growing preference for smaller, discount stores, according to the annual BrandZ ranking from WPP and Millward Brown.

The value of Aldi's brand, however, gained 22pc to $11.7m.

Lidl's brand increased by 27pc to $6m, rounding off the ranking's 20 most valuable retail brands.

Tesco - the largest faller among the index's top 20 retail brands, a category that grew 24pc overall - dropped to sixth place among the UK's most valuable brands, falling behind BP.

Tesco's is one of the "big four" UK supermarkets that has lost considerable market share to their smaller rivals.

Last month, a surge in sales at Aldi catapulted the German discounter ahead of Waitrose to become Britain's sixth largest supermarket, cutting the size of the market controlled by the big four to 72.8pc, its lowest level in a decade.

Meanwhile, Apple stole the top spot from Google on the BrandZ index after its brand value increased by two-thirds to $247bn following the success of the iPhone 6.

Technology was the fastest growing category on the index, gaining 24pc in value to more than $1 trillion and accounting for nearly a third of the 100 brands, led by Apple, Google, Microsoft and IBM in the top four places.

Alibaba, the Chinese e-commerce giant that floated last year in the biggest IPO of all time, joined the 100-strong ranking this year, entering at 13th place - above US titans Amazon and Walmart - and becoming the most valuable retail brand at $66.4m. Alibaba's presence boosted the retail category by 24pc.

The report pointed out that Alibaba and Amazon are the two top retail brands despite that fact that neither operates any physical stores.

The increase in Chinese brands was a standout theme of this year's index, with 14 Chinese companies in the top 100 representing a value growth of 1004pc since there was just one Chinese brand included in 2006.

American brands performed well, gaining 15pc in value last year, although European brands lost 9pc.

Overall, the UK's top 10 brands lost 4pc in value, while the world's 100 most valuable brands gained 14pc.

"Brand value has risen substantially despite a disruptive decade," said WPP's David Roth.

"This is a pivotal moment for brand builders. We're at the threshold of a new normal, and a changing consumer. The past 10 years of valuing brands proves that investing in creating strong, valuable brands delivers superior returns to shareholders."

(Daily Telegraph)

Irish Independent

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