Surprising Twist: The UK’s Top Brands Experience a 14% Drop in Value! Uncover the Unexpected!

The brand value of the UK's leading companies has suffered due to the ongoing cost of living crisis, as per the Kantar BrandZ UK Top 75 ranking. UK-based brands have witnessed a 14% decline in their total brand value this year. This contrasts with a slight growth of 1% seen in 2022, although it is marginally better than the 20% drop recorded in the global ranking earlier this year.

Vodafone ($2.6bn), HSBC ($1.89bn), and Shell ($1.8bn) continue to hold their positions as the top three brands on the list, maintaining their rankings from 2022 and 2021. On the other hand, BT, previously ranked fourth, has now dropped to sixth place, while BP has moved up one spot from fifth to fourth.

A notable brand in the top ten is Johnnie Walker, the whisky brand, which has made significant progress by moving up four places to claim the fifth position this year. Johnnie Walker's brand value has witnessed remarkable growth, with an increase of $10.9bn, marking a 32% rise compared to the figure recorded in 2021.

Adele Joliffe, head of brand consultants, insights at Kantar, is not surprised by the negative outlook for the UK. She explains that factors such as the war in Ukraine, cost of living crisis, supply chain issues, and inflation have had a significant impact on share prices and the FTSE 100. However, Joliffe notes that businesses with strong brands, such as Burberry and Dove, continue to perform well. Burberry has experienced the highest growth in the top 20 brands, with a 17% increase to $4.7 billion, while Dove has entered the top 10 in ninth place with a value of $6.2 billion.

Monzo and Premier Inn are the only new additions to the annual ranking, securing the 72nd and 74th positions respectively. According to Joliffe, Monzo has successfully bypassed the obstacles commonly faced by challenger brands, such as rapid growth followed by stagnation, by enhancing its brand and improving its presence in the minds of consumers.

Joliffe highlights that Premier Inn's success can be attributed to its strong commitment to ensuring its customers have a relaxed experience. Despite the challenges posed by the pandemic, the hotel chain has managed to increase its market share by 4% over the past decade. Joliffe adds that Premier Inn possesses a consistently distinctive personality and injects a touch of irreverence into everything it does.

Should UK brands be worried?

The decline in brand value of 14% is in line with global trends, but it lacks encouragement. According to Joliffe, the UK is falling behind in the medium term, making success stories this year an exception rather than the norm.

UK brands ranked last in terms of how distinctive consumers perceive them to be among the eight markets analyzed by Kantar. This trend, of being more salient but less different, is worrisome for brands. This situation is similar to what has occurred with Wilko and many other brands that have left the UK high street in recent years.

UK brands are not necessarily declining, but when the imbalance becomes extreme and people think of the brand but fail to find the unique features to support it, there is a risk of the brand's reputation being affected.

Kantar's BrandZ valuation process calculates a brand's monetary worth by multiplying its financial value in US dollars with its brand contribution. This yields the Brand Value, which represents the specific dollar amount that a brand adds to the overall value of a company. By isolating and measuring this intangible asset, we uncover a previously unrecognized source of shareholder value.

The brand contribution is determined through consumer research, which quantifies the extent to which consumers' purchasing decisions and willingness to pay a higher price can be attributed to the brand's equity. This research bridges the gap between consumer perceptions and actions.

Kantar's annual rankings for global and local brand valuation merge meticulous financial analysis with comprehensive research on brand equity. For over two decades, BrandZ has provided business leaders with valuable brand-building insights, gathering interviews from 4.2 million consumers and covering 21,000 brands across 54 markets.