Telstra Has Leapfrogged Woolworths As Australia's Most Valuable Brand

02/02/2016 3:39 PM AEDT | Updated 15/07/2016 12:51 PM AEST
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Business people walk through the foyer of Telstra Corp.'s head office in Sydney, Australia, Thursday, Aug. 9, 2012. Australia's largest telecommunications company reported a 5.4 percent increase in annual profit amid a boost in new mobile phone customers. (AP Photo/Rob Griffith)

Telstra has dethroned Woolworths as Australia's most valuable brand as competition against the supermarket giant ramps up especially from cut-price challenger Aldi.

The latest Brand Finance Global 500 rankings, released Tuesday, showed a 23 percent jump in Telstra's brand value to $US10.7 billion, taking it to the top of the 2016 poll.

Woolworths slipped 14 percent from leader to second in the Aussie rankings, recording a brand value of $US7.75 billion.

The four big banks all made the local top 10, with ANZ ranked third, followed by the Commonwealth Bank, Westpac and National Australia Bank.

Woolworths' big rival, Coles, was seventh, while Telstra's main opponent Optus came in eighth.

There was no Australian company ranked in the global 100, with Telstra entering on 110. Globally, Disney was named the world's most powerful brand, while Apple was designated most valuable.

Brand Finance calculates brand value by determining how much a company would be willing to pay to license its brand as if it did not own it. The approach involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for its use.

Brand Finance Australia managing director Mark Crowe told Business Insider the biggest challenge to Woolworths was coming from German discount outlet Aldi.

That threat was exacerbated, he said, by "weak brand perceptions that has resulted in a downgrade in Woolworths brand rating to AA".

He was particularly impressed by the outcome for Telstra, saying the telco's brand value had surged despite only a 3.6 percent increase in revenue.

The downshift for Woolworths' brand comes in the wake of its decision to scrap the Masters home improvement business -- created to compete with Bunnings.

Masters has struggled since starting in 2011, and is reportedly set to incur operating losses of almost $1 billion.

The 2016 Brand Finance rankings were reportedly put together before Woolworths' decision to abandon Masters business was publicised.

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