Picture: FREDDY MAVUNDA
Despite tough trading conditions and soaring food price inflation, brands in the key retail sector are putting up a strong fight.
Spar is the fastest-growing South African brand, up 48% to a brand value of R21.4bn, according to the latest Brand Finance South Africa 100 ranking out this week.
Brand Finance, a leading brand valuation company, says Spar’s growth reflects a positive outlook for all retail brands. Spar opened 41 new stores in 2022, recorded 6% revenue growth and upped revenue forecasts.
Pick n Pay (brand value up 30% to R13.5bn) has become the strongest brand with a brand strength index (BSI) score of 94 out of 100.
Woolworths (brand value up 25% to R21.7bn) has the highest sustainability perceptions score of 6.02 out of 10, having long been recognised as a pioneering retailer in the sustainability field.
Spar is the seventh most valuable brand, just behind Woolworths, which follows Pick n Pay on the top 10 strongest list. Other retailers on the list are Clicks, Checkers, Dis-Chem and Game.
One of the more interesting findings in the rankings is that premium dog-food brand Canine Cuisine, part of the RCL group, has grown by 40% in the past 12 months.
The pet-care market is expected to grow at a compound annual growth rate of 6.6% over the next three years, according to Insight Survey’s 2022 landscape report.
Two companies that saw their brand values increase by 39% were no-frills retail brand Usave, part of the Shoprite Group, and Gold Fields, which soared despite its failed Yamana Gold acquisition in Canada and the departure of CEO Chris Griffith.
Overall, banking is the most valuable sector, up 28% in aggregate brand value. Brand Finance says a strong post-pandemic recovery has set banks up for impressive brand value growth. The sector accounts for five brands in the top 10 of the ranking and is also the most valuable sector in the ranking, making up 24% of total brand value.
The combined brand value of the 11 banks in the ranking is R146.5bn, R25bn more than the next most valuable sector, telecoms, with six brands valued at a combined R121.5bn.
Standard Bank (brand value up 27% to R29.7bn) is the third most valuable South African brand, making it the most valuable banking brand for the second successive year. The bank’s 27% year-on-year growth has further widened the gap with First National Bank (brand value up 5% to R26.1bn) and Absa (brand value up 19% to R25.3bn), which are fourth and fifth in the ranking. Investec (brand value up 15% to R16.8bn) has risen three places to re-enter the top 10.
Telecoms giant MTN (brand value up 24% to R74.3bn) is the most valuable brand for the 12th time in the past 13 years. Its brand value is now 50% higher than its pre-pandemic level.
Brand Finance Africa MD Jeremy Sampson says this is an impressive statistic considering the difficult operating conditions and the complex geopolitical environment the brand has faced.
“It is invariably the case that when economic conditions are particularly challenging, strong brands show off their pedigree,” he says. “As the world economy and South Africa recover from the Covid-19 pandemic, the brands that have continued to invest in their future are prospering.”
MTN’s brand is worth nearly twice as much as the second most valuable brand, Vodacom (brand value up 33% to R39.8bn). Though Vodacom is not yet operating on the same scale as MTN, Brand Finance found it is outperforming its rival in several key customer satisfaction metrics including consideration, usage, reputation, quality and customer service.
This piece originally appeared in the Financial Mail.
