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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.
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.
