The 100 most valuable brands | companies brands of the UK
With a brand value of £28,267 million, Shell is the UK’s most valuable company. The top five of the most valuable brands in the country, as reported by 2017 Brand Finance are Vodafone, HSBC, BP and EY.
With increasing competition for space in the UK market, thanks in no small part to a number of new, agile market disruptors challenging established names by using innovative technologies, major brands are keen to do whatever it takes to cement their market share. Brand loyalty is no longer enough to guarantee continuous revenue flows. However, in spite of this the world’s top brands recently expanded their value to $3.4 trillion. This international uptick does not seem to reflect the state of British brands.
Brand Finance have conducted their annual study illustrating the 100 most valuable company brands in 2017. British brands have faced an overall 6% decline in value compared with last year, as 88 individual brands have experienced a decline in value. The blame has been placed on Brexit being the leading factor for the devaluation of the sterling during the presence of the Brexit vote. The significant drop in brand value has posed a threat for the British policy-makers, brand owners, workers and consumers. Senior politicians have promised to restore or further improve brand’s values through protectionist measures, and the Prime Minister, Theresa May, has vowed to employ tighter restrictions on the scrutiny of brand acquisitions.
The UK remains one of the most popular places to buy brands, the world centre of the marketing and advertising industry, and also the most attractive place for brand creation. The UK provides its people with opportunities and options, occurrence of regulatory scrutiny of takeovers is relatively rare, and workforce restructuring is considerably straightforward, particularly when compared with its European counterparts.
The devaluation of the British brands has made the brands more susceptible to international buyers, as exemplified by Unilever and Burberry, where both companies had to fend off bids from US brands Kraft-Heinz and Coach, while ITV has also been the victim of a large range of bids. Another popular cereal franchise, Weetabix, could not be rescued from American influence in the form of the consumer packaged goods holding company. The same can be said for world renowned chip-maker ARM, which was acquired by Japan’s SoftBank. The direct aftermath of Brexit has been the most devastating on the two sectors investment and employment.
David Haigh, CEO of Brand Finance, said, “While the impact of Brexit on the broader economy has not lived up to the doomsday scenarios, British brands are clearly vulnerable to takeover by foreign firms. At one level, this is testament to Britain’s strength at developing and managing desirable brand assets. However more should be done to ensure Britain gets its fair share of the spoils for its quality brands. Tighter regulation is one solution, but another is for management and shareholders to be fully aware of both the saleable value of their brands and the value that those brands contribute to the overall business. This way hasty sales for less than fair value, that endanger British jobs, might be avoided.”
The negativity, however, does not align with the British brands in terms of their sterling-denominated figures, in fact it shows quite the opposite. The British brands have witnessed a decline in terms of their dollar value. The figures taken into consideration, however, will be in GBP, as changing the currency reverses the aforementioned negative effect of the USD. 85 brands are, in fact, increasing in value according to GBP.
Top 10 brands
It may come as no surprise that the Dutch oil company Shell has been awarded with the first spot on Brand Finance “the most valuable UK brands” list. Royal Dutch Shell is of Anglo-Dutch origins, having headquarters in the Netherlands while being incorporated in the UK. The oil and gas company has also been cited as sixth-largest company in the world measured by 2017 revenues. The company has a brand value of £28,267 in 2017 with nearly a 7 billion difference since 2017.
The growth of brand value is linked to the better financial performance of the company as well as the growing sentiment among consumers that Shell provides for sustainability. There appears to be a large difference between the first and second most valuable companies. In second place, in terms of current brand value, HSBC provides a great degree of financial services to assist their 54 million customers across 75 different countries, yet still experienced the opposite of Vodafone with a loss of over £1,500 million in value, and a drop to third place on those terms.
Vodafone has been at the forefront of telecommunication development in the UK for the last few decades, even hosting the first two mobile calls in the country. BP, Shell’s competitor in the oil and gas business has, meanwhile, been well publicised for its release of 200 million gallons of crude oil into the Gulf of Mexico for 87 days in 2010. Despite causing the largest oil spill in history, BP has recovered, and remains in the top 5 most valuable companies with a value of £14,491 million, with just under a £3 billion increase since last year. Consulting industry giants EY come in at fifth, with the Big Four member having recently appointed 63 partners in its UK offices alone. In sixth place Barclays has reached 48 million customers. The famous British bank, with a number of financial institutions, is eyeing new operations in mainland Europe currently, and has been hitting discount rates hard to maintain membership, which is its response to combat the uncertainty of Brexit, leading to a brand value drop of 7%.
Having recently been heavily criticised for the pricing of their internet services, telecom giant BT were, meanwhile, hit by the significant loss of £3,400 million in a year, and dropped from 4th to 7th in most valueable UK firms. In 8th place comes supermarket giant Tesco, the founder’s business motto "pile it high and sell it cheap" appears to have been put into motion with their yearly revenue increases, equating to £8,333 million in 2017. Sky and O2 take the last two spots in the top 10, with O2 showing an impressive difference of £2,000 million compared with last year.
Top 100 brands
Another relatively popular sector in the list is the food and beverage sector, with 5 positions being held by the top supermarkets in the nation. ASDA saw an increase from 14th to 11th positions. If its growth continues to increase at a steady pace, the supermarket could make the top 10. Other brands on the list included Sainsbury’s (#17), Marks & Spencer (#24), Morrisons (#43), and Johnnie Walker (#20) and Co-operative, Primark (#57), John Lewis (#64), Lipton (#65), Waitrose (#66), Cadbury(#74), Tate and Lyle (#80), Ovaltine (#97). The world’s first chocolatier to create milk chocolate and UK’s most beloved chocolate brand, Cadbury went from 91 to 74 after their £300 million increase in profits.
Famous tea company Twinings may have 300 years of experience, but still dropped down 27 ranks meanwhile, as the tea market remains competitive, particularly as companies have begun producing their own labels, similar in taste but lower in price – with own-label products currently helping Aldi and Lidl storm the American supermarket scene. Primark, which is a subsidiary of AB Foods, has witnessed a 30% decrease in food prices and significant currency movements, which hurt the company’s overall standing.
In line with Barclays, meanwhile, the majority of banks suffered from the Brexit referendum as well as the drop in the value of the sterling. The most valuable brands in the banking sector: Lloyds (#13), Halifax (#33), NatWest (#37), Royal Bank of Scotland (#38) and Bank of Scotland (#78), have also phased some declines in their overall value, with Halifax dropping from 22 to 33 with a loss of £500 million in value. Out of all the banks from Scotland, Scottish Widows was the only bank to have flourished going from 68 to the top 50 with 48. The two airlines display the increased popularity of budget airlines. Weakened consumer spending power has made Easy Jet increase from £836 million to £1340 million over the course of a year. Nonetheless, British Airways (BA) still falls to 29th position with a £210 million loss in profit, thus down by 7%.
The broadcasting institution of the BBC charges a licence fee of £145.50 a year and is Europe's biggest provider of media and creative skills training. The Corporation is presently placed as the 15th most valuable company, after a loss of around £100 million. Another company worth mentioning is Unilever (#23), which, alongside Shell, comprises on of two Dutch companies that have made the top 25, therefore overshadowing their British counterparts.
In retail, Topshop and River Island have fallen outside of the top 100, while the sector holds a sparse 9 positions in the top 100 list, including Asda (#11), Marks & Spencers (#24), Burberry (#25), Carphone Warehouse (#52), Next (#54), Travis Perkins (#67), Co-operative (#70), Sports Direct (#75) and B&Q (#83). The apparel sector has been hard hit with scandals surrounding the working conditions at Shirebook warehouse, which is the preliminary reason behind the 5% drop for Sport Direct’s brand value. Axe, also known as Lynx in the UK, was deemed the fastest growing brand, with an increase of 91% to £2.1 billion with the assistance of Unilever, promoting a new image of the brand that has evidently paid off.
As can be deduced from the figures, the most valuable sectors remain the telecommunications industry, the banking sectors and, most importantly, the oil and gas sectors. Aside from BT, little to no changes have taken place in the brands’ ranks within the top 10 companies. Thus, it is safe to say these brands will secure their place in the Brand Finance league and continue to expand. The increase of globalisation will bring about the emergence of rivals which will only pose a greater threat to the telecommunications, food and retail industry. Meanwhile, the increased promotion of green energy will threaten the oil and gas industries.
