Tesco loses to Aldi in global brand rankings

Aldi is now eighth in the chart after achieving a 22% boost in brand value, making it worth £7.6bn ($11.7bn), according to BrandZ’s ranking. The league was compiled by advertising agency WPP and research firm Millward Brown.

Tesco, which rose four places to number 12, lost 37% of its brand value compared with last year and is now worth £6.1bn ($9.4bn).

Just five years ago, Tesco was ranked as the 17^th most valuable global brand in the BrandZ top 100 list. This year it wasn’t on the list, while Aldi climbed two places to number 90.

Tesco ranked 17^th

“Low grocery prices and convenient locations attract shoppers to food discounters Aldi and Lidl, hypermarkets like Tesco [have] opened smaller stores,” said the report, which worked out brand value by interviewing more than 3M consumers globally.

Consumers were asked questions about the brands, which included how much they trusted them and whether they would pay more for products.

Each business also had its financial and business performance analysed in the countries in which it operated.

Alison Casey, senior client director for retail at Millward Brown, said: “The discounters provide a great customer experience; they are relevant to cost-conscious shoppers with everyday low pricing and their smaller-sized store shopping format.

“Importantly, they have also articulated and clearly communicated what they stand for,” Casey added.

“Delivering on the brand promise is a critical component of success for all major brands and it’s helping the discounters to build engagement, trust and loyalty with customers.”

Worth almost £230bn

The combined value of the retailers on the top 20 list increased by 24% on last year and is now worth almost £230bn ($350bn), the report said.

Meanwhile, online retailers Alibaba and Amazon jumped to the top of the 20 most valuable retail brands list, signalling a major shift in consumer shopping habits.

Alibaba climbed two spaces to the top spot and Amazon climbed by four to second position this year, overtaking Walmart, despite having no physical retail space, according to the report.

Alibaba also entered the top 100 most valuable global brands list at number 13, followed by Amazon at number 14.

The report said: “Alibaba and Amazon have no physical stores, but surpassed Walmart, which operates over 10,000 stores worldwide.

“This irony illustrates the impact of e-commerce on the radical transformation and rationalisation of retail.”