Telstra is now Australia's most valuable brand, overtaking Woolworths

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Woolworths, which is now seeking a turnaround CEO after profits fell flat, has lost its place as Australia’s most valuable brand.

The latest Brand Finance Global 500 shows Woolworths still one of the eight local companies to make the list, but after falling 14% in value over the last 12 month to $US7.755 billion, the retailer is now behind Telstra, which increased by 23% to $10.707 billion.

Here are the eight Australian brands to make it to the global 500:

“With sales expecting to slow at faster rates than rivals, the biggest challenge to Woolworths and other supermarket operators is coming from the German discount chain Aldi,” says Mark Crowe, Brand Finance Australia managing director.

“This threat is exacerbated by weak brand perceptions that has resulted in a downgrade in Woolworths brand rating to AA.”

Telstra, which climbed 35 places to be ranked 110 in the Global 500, is now Australia’s number one brand despite increasing competition, mainly in mobile.

“It is testimony to Telstra’s continued brand strength which has driven a 23% increase in value despite only a 3.6% increase in revenue,” says Crowe.

The big four Australian banks occupy third to seventh places in the local list.

ANZ has been the big performer, moving to third from fourth, with a brand valued at $7,458 billion, up 12% on the previous year.

“ANZ has regained the number one bank rating through increased brand strength especially in terms of brand equity,” says Crowe.

Coles, owned by Wesfarmers and the big competitor to Woolworths, dropped one place to seventh and saw its brand value eroded by 17% to $4.826 billion.

Brand value is determined using factors including familiarity, loyalty, promotion, marketing investment, staff satisfaction and corporate reputation.

Brand Finance calculates a value a company would be willing to pay to license its brand as if it did not own it. This approach involves estimating future revenue and calculating a royalty rate to be charged for the use of the brand.

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