Fame doesn't equal fortune: UK retailers 'must reinvigorate themselves'
The value growth of the UK’s top retail brands is falling behind that of their global counterparts, according to research released by WPP and Kantar.
While the former grew their combined value by 4% over the last year, their performance is significantly lower than that of the leading global retail brands (+25%). It also represents a slowdown compared with the 2018 value growth of 11%.
The retail sector dominates the UK’s top 75 brands with 14 retailers making the ranking: Tesco, Next, Asda, Sainsbury's, Marks & Spencer, Morrisons, Ocado, Boots, Co-op, Very, Waitrose, John Lewis, WHSmith and littlewoods.com. Online-only players Ocado and Very grew the most – by 35% and 21% respectively. Without them, the combined value of the UK’s top retail brands would have increased by just 2%.
UK retailers are facing a raft of pressures, many driven by the changing needs of consumers. As a consequence, a record number (net 2,481) of well-known names disappeared from the UK’s top 500 high streets in 2018, including Maplin, Toys R Us and Poundworld. Others, in particular fashion brands, are moving from high street sites to new shopping areas such as train stations, airports and malls that attract high footfall and charge lower rents and rates.
“The mantra here is that you cannot live off fame alone. Salience has kept brands buoyant, but without meaningful difference this is not sustainable; salience will drain away, along with value,” says Henry Heywood, Head of Brand at Kantar. “To avoid losing more ground, retailers must reinvigorate themselves – invest in long-term brand building, by communicating to a less engaged, less loyal and more demanding consumer about why they are still relevant.”
The research also puts the spotlight on Irish brand Primark – not in the UK ranking – which has flourished on the high street, driven by its ability to create meaningful difference. Built around value-for-money fashion, the brand has developed a strong emotional connection with young shoppers online via celebrity influencers and other paid partnerships.
Heywood concludes: “While the death of the physical store is exaggerated, traditional retailers are having to reinvent themselves for a new generation of shoppers, connecting digital platforms and online experiences with the physical offline experience. But now with the advent of online to offline, such as the launch of the Amazon Clicks & Mortar initiative in Manchester, there will be additional pressure on an already beleaguered high street.”