For the second straight year, RBC has topped BrandZ’s annual ranking of Canada’s top 40 most valuable brands, with a total brand value of $21.7 billion. The pandemic was a key factor in strengthening the overall performance of the retail sector, which markedly outperformed other categories.
While the 40 brands listed in this year’s report from WPP/Kantar Canada saw their brand value dip by a combined 6%, the 13 retailers grew their brand value by an average 13%. The category’s success is largely attributable to the fact that so many people spent time thinking about how and where they were buying the things they needed to buy, said Paul Gareau, senior vice-president of brand, media and content for Kantar.
“We’re not seeing true brand-building within the retail sector; we’re not seeing more meaningfulness and differentiation from consumers’ evaluation of these brands,” he said. “It really comes down to that salience driving it. There’s more work to be done here within the retail sector.”
Many of the gains within the retail category were driven by value and grocery retailers, with Loblaw Companies Ltd. discount grocery brand No Frills the lone new entry on this year’s list (placing 39th overall, with a total brand value of $370 million). Other retail brands were also among the fastest climbers, with Metro Inc.’s Food Basics banner jumping by 24% to $419 million (36th), Dollarama jumping 21% to $1.9 billion (15th), Sobeys increasing 19% to $466 million (34th) and Shoppers Drug Mart jumping 17% to $1.7 billion (20th).
The brand value ranking is based on a combination of market data obtained from Bloomberg, combined with consumer insights gleaned from interviews with more than 56,000 Canadians, covering 656 brands across 49 categories. It is limited to brands created in Canada that are publicly traded.
Overall, the 40 brands on the Canadian list shed approximately US$135 billion in brand value in the past year, owing to the tough economic conditions arising out of the global pandemic. However, the report notes that Canadian companies fared better than those in similarly sized European economies like Spain and Italy.
Sixteen of the brands on the list actually increased their value in the past year, said Gareau. “Canadian brands have been much more resilient,” he said, noting that the top 40 U.K. brands lost approximately 13.5% of their total value in the past year.
RBC and second-ranked TD (with a brand value of $17.2 billion) account for more than one-quarter (29%) of the total brand value of the top 40 entrants on the list. Banking accounts for 42% of the total share, ahead of telecom at 23%. The top five brands account for more than half (53%) of the total value.
The report identified Lululemon as the biggest success story among Canadian brands, with an industry-leading 60% rise in brand value to $12.1 billion, pushing it up from fifth to fourth on the list. BrandZ said the company benefited from being “ecommerce ready” at a time when being at home gave people time to focus on wellbeing, and was also helped by a strategic expansion into the male segment.
Just over one-quarter (28%) of Canadian brands’ value comes from international markets, compared to 62% for brands in the U.K. rankings. According to BrandZ, many Canadian brands struggle outside of Canada because they lack a strong perception of difference. “There’s a lot of room to grow for Canada outside of [its] borders,” said Gareau.
Vancouver-based Lululemon was the sole exception when it came to homegrown companies creating brand value outside the country, generating 86% of its value internationally. The company is the most differentiated among Canada’s top 40 brands, said Gareau, which has helped it achieve success even against strong competitors such as Nike, New Balance etc. “Over the course of the last three or four years, we’ve seen a huge increase in the brand’s potential to grow into the future,” he said.
Just two Canadian brands appear on the global list of top 100 brands—which is led by Amazon—with RBC coming in 60th and TD 77th. The top 100 global companies have a combined brand value of US$5 trillion, growing by more than 6% (approximately US$277 billion) despite the pandemic. “It’s a hugely impressive figure, given the economic backdrop,” said Martin Guerrieria, global head of research for BrandZ/Kantar.