UK brands see value fall amid struggle to differentiate

The UK’s most valuable 30 brands have seen their combined value fall by 7%. This may be because they are struggling to differentiate themselves from international competition, according to new Kantar research.

Many of the world’s leading brands have enjoyed a bullish year, outside of the UK. According to Kantar’s study, the world’s leading 30 brands enjoyed value growth of 22% in the last year.

In India, the top 30 saw value boosted by 18%, while Germany and Italy enjoyed growth of 10% each. But the UK saw the worst performance of all the economies studied. There, the leading 30 brands saw their value shrink by 7%.

There could be numerous causes behind this. It cannot have helped that the UK also had a much lower growth in GDP growth than many other economies. At a forecast 1.1% expansion, it was far from the growth of India on 6.8%. But its economy did expand faster than Germany – which struggled to just 0.2% growth.

So, what is holding back UK brands? Looking at a wider field of 75%, Kantar did find that the shrinkage fell to just 5% – suggesting the smaller names on the list might be doing better at courting new business.

Indeed, the upside is that the top 75 are now worth a combined $230 billion, and that annual decline of 5% is actually an improvement on 2023’s performance, when the total valuation of the UK’s top brands slipped by 14%. But how can the biggest brands learn from the middle of the pack, and return to growth? According to Kantar’s researchers, the first order of business will be to appear more unique.

UK brands are among the weakest for how different and meaningful consumers perceive them to be, impacting how much people are willing to pay for them. Kantar found that two in five of the UK’s biggest brands aren’t seen positively enough to justify charging a higher than average price for their category. Just under a third have less than a 50% chance of growth in the next 12 months.

Speaking on the findings, Adele Jolliffe, head of brand consultancy, insights division at Kantar, commented, “Consumer confidence is returning as inflation eases, although depending on what the chancellor announces in her budget on 30 October, we could see new pressures on household spending. With the right marketing investment, however, brands can put themselves in a strong position not just to weather any immediate uncertainty, but to grow over the long term. Based on how likely people are to choose them, for example, one third of the brands we’ve evaluated this year could sell more if their products and services were easier to access – whether that’s through investment in store opening or online fulfilment for example.”

Marks & Spencer is one of 2024’s standout performers in Kantar BrandZ’s UK ranking, bucking the national trend to grow its brand valuation by a whopping 38% to $2.5 billion. By comparison, wider retail brand values rose by 1% overall, while food and beverages brand values fell 9% year-on-year.

On what has fuelled the retailer’s success, Jolliffe added, “Marks & Spencer has been firing on all cylinders and has really got its mojo back – we’ve tracked significant improvements in how people view the brand across both grocery and fashion. It has re-found its competitive edge in clothing, for example, closing the gap with rivals like John Lewis in terms of how different people think its fashion offer is. Its Christmas advertising campaign paid dividends well beyond the festive season, helping M&S be more relevant to more people, more of the time.”