Woolworths is Australia's most valuable brand, according to a new study – and the big banks have taken a hit

• Woolies has been named Australia's most valuable brand, according to a new report from Brand Finance.

• The supermarket chain was followed on the list by Telstra, Commonwealth Bank and BHP.

• All the big four banks, however, lost brand value during the year.

• Visit Business Insider Australia’s homepage for more stories.

---

Woolworths has been named Australia's most valuable brand at $11.8 billion, beating out Telstra and fellow supermarket Coles.

The findings come from the new Australia 100 2020 report from consultancy firm Brand Finance.

Brand Finance defines brand value as "the value of the trademark and associated marketing IP" within a company. The firm also looks at the strength of brands, which takes into account factors like staff satisfaction, corporate reputation, and marketing investment.

However, Woolies was hampered by an underpayment scandal in 2019, where it admitted it may owe workers as much as $300 million. After the admission, Woolworths Group Chairman Gordon Cairns and CEO Brad Banducci both agreed to take pay cuts.

"Woolworths is facing a difficult year ahead after the damaging investigation into staff’s pay - how the brand responds in the coming year will be pivotal if it is to retain its title of the most valuable Australian brand,” Mark Crowe, Managing Director, Brand Finance Australia, said in a statement.

Following Woolies on the most valuable brand was Telstra, Commonwealth Bank, BHP and Coles.

Coles secured an 0.2% increase to reach $7.5 billion in value, a positive sign after its demerger from Wesfarmers.

Crowe said Australia is seeing "a decreasingly optimistic market" where many of its biggest consumer brands are suffering. But he added that Woolies and Coles are "bucking the trend", backed by their "longstanding position in the marketplace."

Telstra had a major 20% drop in brand value to $11.7 billion, due in part to the NBN.

"The NBN rollout has significantly affected the brand’s profits, which dropped 40% in 2019, and the long-term economic outlook for the brand looks challenging," Brand Finance said in a statement.

On the other hand, fellow telco Optus – valued at $4.7 billion – was named Australia's strongest brand following its customer service and value for money.

“Optus’ solid reputation for excellent customer service and value for money, is reflected in the one million new post‑paid customers that subscribed in the last year," Crowe added.

The Australian banking sector takes a hit

Aussie banks dropped in brand value amid the global economic slowdown, the fallout from the Royal Commission and scandals in the sector.

Commonwealth Bank, the biggest lender in Australia, dropped 3% to reach $10.2 billion while ANZ suffered the highest percentage loss in the top 20, dropping 25.7% to A$6.8 billion.

Westpac went down 21% to $5.7 billion amid not only the royal commission scandal, but reports it breached anti-money laundering laws, which impacted its reputation. In November 2019, Brian Hartzer stepped down as CEO of Westpac Group after allegations the company violated anti-money laundering and counter-terrorism laws more than 23 million times in just five years.

“Financial institutions are certainly familiar with being scrutinised closely and with the country’s banks feeling the heat following the Royal Commission, the spotlight will be closely on them as they try to rebuild and repair their damaged reputations," Crowe said. "Australia’s banks all face the same brand challenge in the coming year, to restore trust, customer retention and satisfaction, and ultimately to rebuild their brand value.”

There were 11 new entrants into the list this year, including engineering and construction company Downer and five wine brands owned by Treasury Wine Estates.

Australian companies feature on the Global 500 list

Seven Aussie companies made it onto Brand Finance's Global 500 list, including Woolworths, Telstra, Commonwealth Bank, BHP, Coles, NAB and ANZ. Global e-commerce giant Amazon took the crown on this list, breaking the US$200 billion brand value mark.

While Amazon has interests in a whole bunch of ventures including consumer electronics, logistics and artificial intelligence, most of its revenue comes from retail.

“The disrupter of the entire retail ecosystem, the brand that boasts the highest brand value ever, Amazon continues to impress across imperishable consumer truths: value, convenience, and choice," Brand Finance CEO David Haigh said in a statement.

Haigh however, questioned what will happen in the future for Amazon. "Today, Amazon’s situation seems more than comfortable, but what will the roaring twenties hold in store?” he said.