Walmart: The Biggest Brand Equity Loser

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April 5, 2011

Although Walmart is still number one, its lost significant brand equity in 2010, according to Interbrand’s Best Retail Brands report, which ranks the top 50 U.S. retail brands as well as the top retail brands in Asia Pacific, Canada, the U.K., France, Germany, and Spain.

Despite the slip in equity, Walmart remains the most valuable retail brand for the third consecutive year, while Woolworths, Shoppers Drug Mart, Tesco, Carrefour, Aldi and Zara are ranked as the number one retail brands in their respective markets.

The recession “offered a rare chance for brands to steal share on purchase decisions that were not normally up for grabs. And steal it they did, with the value category and supermarkets being most aggressive,” Interbrand wrote in the U.S. portion of the report. “Consequently, the biggest loser appears to be Walmart,” which dropped 8 percent in value.

The top 10 U.S. retail brands in rank order are Walmart, Target, The Home Depot, Best Buy, CVS Pharmacy, Walgreens, Sam’s Club, Coach, Amazon and Dell. Other food retailers in the top 50 include Publix (No. 14), Dollar General (No. 16), Costco (No. 19), Dollar Tree (No. 43), Whole Foods (No. 44, Big Lots (No. 45) and Family Dollar (No. 46).

“U.S. retailers are leading on the road to recovery much as the U.S. was first affected by the economic downturn in 2008,” Interbrand said in a statement. “Across Europe, retailers are harder pressed to generate value from cash-strapped consumers, and Asian retailers are presented with both opportunities and challenges as markets expand consumers’ preferences.

”The category most challenged by the shifts in the marketplace this year were grocery retailers,” said Jez Frampton, global CEO of Interbrand, in the report introduction. “Brands like Asda (part of the Walmart group), dropped significantly in brand value in the face of intense competition and failure to use their brand to bring something new to the fray, something to sustain shoppers’ positive perceptions of their value. Meanwhile the exceptions to the rule –Whole Foods, Woolworths and Tesco – all saw significant increases in brand value in 2011 due to their ability to understand customers and reinvent what a grocery retailer can offer, expressing the brand idea through many small but meaningful actions that unlock value creation and lead to big impact.”

Interbrand also publishes The Best Global Brands annually, for which it is widely known. Click here for a copy Interbrand’s Best Retail Brands 2011 report.

SBD Views: While not a store brands story per se, we see the issue of retailer brand value as captured in the Interbrand research as a critical driving force for future store brands growth. The drop in Walmart’s brand value is further evidence that the retail giant's new direction under Bill Simon's leadership, is absolutely necessary. It will be interesting to see how Walmart’s brand value fares in the 2012 report. -- John Failla for Store Brands Decisions

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