New data from Brand Finance reveals that brands like Dollar Tree, Family Dollar, and B&M are rising while retail giants struggle to build brand value
LONDON, 25 June 2024 – Amazon's brand value increased 3% to USD308.9 billion, reaffirming its position as the world’s most valuable retail brand, as new data from Brand Finance indicates an American retail sector struggling to maintain brand value. Household names like Walmart (-15% to USD96.8 billion) and Home Depot (-14% to USD52.8 billion) maintained second and third ranks, respectively, despite brand value declines.
Discount and more affordable brands such as Dollar Tree (brand value up 23% to USD5.1 billion), Ross Dress for Less (brand value up 18% to USD5.1 billion), Family Dollar (brand value up 15% to USD3.2 billion), and the UK’s B&M (brand value up 19% to USD2.3 billion) each saw improved brand values. This reflects a shift in consumer brand preferences in response to inflationary and cost-of-living pressures.
Annie Brown, General Manager, UK Consulting, Brand Finance, commented:
“Brand Finance research reveals a significant trend, as major economies are witnessing declines in total brand values across the sector, with the US down 3%, China down 22%, Germany down 4%, the UK down 12%, and Japan down 9%. In contrast, our Retail 100 2024 ranking indicates brand value growth in emerging markets, as Mexico's total brand value surged 38%, while Italy's rose 18%. This year’s fastest-growing brands include Mexico's Chedraui and Italy's Conad, with brand values increasing by 33% and 27%, respectively.”
With a Brand Strength Index (BSI) score of 88.2 out of 100 and a corresponding AAA rating, Australia’s Bunnings is the world’s strongest retail brand. According to Brand Finance research, Bunnings earned outstanding scores for several metrics, including promotion and word of mouth, with 70% of respondents in Australia reporting having a conversation about the brand. Decathlon ranks second for brand strength with a BSI score of 87.3 out of 100 and an AAA rating and continues to score highly in terms of perceptions of its people (customer service), familiarity, and reputation, excelling in value for money and loyalty.
Lazada, one of Southeast Asia’s largest ecommerce operators, is now the world’s fastest-growing retail brand, with a 40% increase in brand value to USD2.1 billion. In 2023, Lazada introduced its value offering “Choice”, aiming to compete with value brands like Temu and Shein. Up 39% to USD3.0 billion, Metro is the world’s second fastest-growing retail brand, followed by Chedraui in third with a 33% increase to USD2.1 billion.
India, a key emerging market, is notably absent from the top 100, despite its economic scale and growing global prominence. However, India's retail sector is poised for rapid growth, with projections suggesting it could exceed USD2 trillion by 2030 or 2032, positioning it as a market to watch closely in future rankings.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
