Woolworths, 7-Eleven tumble in reputation ranks while JB Hi-Fi tops the list

Woolworths has fallen more than 20 places in AMR’s annual reputation index, as ongoing speculation about the retail giant’s future continues to take a toll.

AMR’s 2016 Corporate Reputation Index, released this week, ranks Woolworths in 40th place among 60 large Australian and international organisations, down from 17th in 2015.

This compares to Wesfarmers’ position at number 18 on the list, down five spots from 2015, and Aldi’s position in seventh spot, up one place from last year.

The index is based on surveys with Australian consumers, aged between 18 and 64. Consumers are asked to give the companies an overall assessment on reputation, as well as rate the companies against seven individual factors, including products and services, innovation, workplace, citizenship, governance, leadership and performance.

AMR managing director Oliver Freeman said in a statement Woolworths’ financial difficulties with its Masters brand, as well as ongoing debate about which supermarkets are winning the battle for shoppers’ dollars, has affected the company’s reputation.

“Woolworths has really struggled in the individual measurements of leadership and financial performance in particular this year,” Freeman said.

“In the past, its overall financial performance helped maintain a strong reputation. But once this started to decline, there was not enough reputational capital to avoid a very large loss of trust among the Australian public.”

Meanwhile, convenience chain 7-Eleven has also fallen in the rankings, dropping 20 places from 36 in last year’s rankings to 56 this year. The drop follows the ongoing and high-profile underpayment scandal at the company, which was exposed during 2015.

Electronics retailer JB Hi-Fi topped the list this year, jumping from third position in last year’s rankings to first. Working in JB Hi-Fi’s favour is positive assessments of the retailer’s products and services, citizenship and workplace.

“This research shows that respect for an organisation is developed well beyond the perception of getting a good deal in a retail environment,” Freeman said.

“Being a responsibly-run company that is open and transparent, and treats its employees well is also vitally important to Australians when it comes to overall reputation.”

Devondale Murray Goulburn landed on the list for the first time this year, securing eighth position, while car makers Toyota and Mazda and airlines Qantas and Air New Zealand also made the top 10.

Australia Post was among the organisations that saw their rankings decline since last year, with the mail carrier slipping from sixth position in 2015 to 19 in 2016. AMR said this is the first time Australia Post has been ranked outside the top 10 since 2009.

Reputation more important than ever

Retail expert Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany this morning, brand reputation is more important than ever for Australian retailers.

“Brand and brand reputation matter more now than ever before as retailers compete now more than ever before,” Walker says.

“There used to be the adage that ‘all press is good’ but I don’t think that is the case anymore.”

In particular, Walker says ‘social brand equity’ is becoming increasingly important for retailers, who can quickly find themselves under fire from a “tsunami of social media commentary” if something goes wrong.

In fact, he says some of the companies that are ranked highly on the list may have benefited in the past 12 months by simply “keeping out of trouble”.

“A retail brand is enhanced not by what [the brand] says but by what it does,” he says.

“If a retailer provides very good service, consistently day-in-day-out … its reputation will grow.”

The AMR Corporate Reputation Index overall rankings: