Target Jumps to No. 2 on the Most Valuable Retail Brands List

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March 16, 2010

Despite the weak economy, Target tallied a 49 percent increase in brand value, leapfrogging Best Buy and The Home Depot to take the No. 2 spot on Interbrand’s list of the Most Valuable U.S. Retail Brands.

“As a brand-led company, Target focused on improving its operations and boosted its performance in the face of reduced growth without compromising brand. They streamlined their assets according to what matters most to its customers,” according to Interbrand, a global retail brand consultant.

The ranking is based on a retailer’s financial forecasting, as well the percentage of sales and profit directly attributable to branding and brand strength.

This marks Walmart’s second year as the top U.S. retail brand, growing its brand value by 19 percent, or $25 billion, to $154 billion, according to Interbrand data.

“The economic downturn made it relevant to an even greater number of shoppers and its store remodel program, Project Impact ––less inventory, wider aisles, lack of in-aisle displays — paid off in high same-store sales. It continues to be the most valuable retail brand in the world,” Interbrand said.

Rounding out the Top 5 retail brands were Best Buy (No. 3), The Home Depot (No. 4) and Walgreens (No. 5).

Meanwhile, the Top 25 companies on the list successfully grew their brand value over past year, not only surviving, but prospering, according to Interbrand. However, the next group of 25 retailers lost value.

“Broadly speaking, falling companies slashed prices, lost focus and chose not to renew their brand through investment or innovation,” Interbrand said in a statement. “Rising companies had their brand proposition fully in place to take advantage of the downturn, invested in brand and convinced the customer of their relevance and worth.“

New to the top 50 list this year are Dollar General (No.18), Buckle (No. 45), Family Dollar (No.46), Advance Auto Parts (No. 47) and Macy’s (No. 50).

Those that fell off the list are Hollister (No. 40 last year), Barnes & Noble (No. 44 last year) Men’s Wearhouse (No. 45 last year), Gymboree (No. 48 last year) and Anthropologie (No. 50 last year).

“While they may be great companies, most retailers are not great brand managers,” according to Interbrand. “In turbulent times, these brands are likely to fail. From a competitive perspective, the tough market demands differentiation, innovation and value-add like never before. Brands need to be clear and compelling to stand out from price-based competition.”

SBD Views: It’s interesting to see the growing brand value of the Top 25 retailers. I believe this reflects the increased attention they are placing on becoming legitimate brand marketers. This trend sets the stage for continued growth in their store brand businesses and a continuation of their leverage with the consumer. Shopper loyalty is increasingly shifting to retailers and away from national brands.          –– John Failla, Store Brands Decisions

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