Walmart still holds the best retail brand

In its annual ranking of the 50 most valuable U.S. retail brands, consultant firm Interbrand found that the world's largest is still the best brand. But when dollar values are added, the race among the top brands is hardly much of a race at all. The trifecta was Walmart, Target and then Home Depot, but the dollars show Bentonville's massive lead. Interbrand calculated the value of "Walmart" at $141 billion, while Target was a mere $25 billion and Home Depot was close behind at $23 billion.

With any ranking, it's important to understand where these numbers come from. First off, the chain must be profitable. This may not make a lot of sense, given that many unprofitable chains have extremely powerful brands. That said, it's one of the company's criteria. The companies must be publicly held (sorry, 7-Eleven). And Interbrand's definition of retail is very strict: "To be defined as a retailer, a brand must generate at least 50 percent of its revenues from sales through its branded retail stores and websites. For example, while Apple was considered, it failed to meet this requirement. In addition, we limit the list to those traditional stores and e–commerce sites that sell goods. In order to focus on traditional retail, we have excluded restaurants, auto dealerships, service providers and gas stations."

The biggest elements are brand strength and the role of the brand in getting sales--which we sort of assumed would be 100 percent of the valuation. Those determinations are inherently subjective. The Role Of Brand component is determined through "primary research, a review of historical roles of brand for companies in that industry, or expert panel assessment," Interbrand said.

As for overall brand strength, Interbrand's approach is a little different: "A proprietary formula is used to connect the Brand Strength Score to a brand-specific discount rate. In turn, that rate is used to discount brand earnings back to a present value, reflecting the likelihood that the brand will be able to withstand challenges and generate sustainable returns into the future."

The list also showed some interesting positional changes. Chain Store Age saw that "Macy's was the biggest riser, increasing brand value by 62 percent and moving up nine spots on the list to number 40. Amazon.com also made strides, moving up to number four on the list, growing brand value by 46 percent. Best Buy fell out of the top 10 for the first time in the five years that Interbrand has ranked the brands, with a brand value decline of 52 percent (it was No. 13 on the list.). Other electronic retailers that dropped were GameStop (No. 26, with a value decline of 29 percent) and Radio Shack (No. 47, with a value decline of 26 percent). Three brands--Express, Cabela's and Anthropologie--joined the list this year, while Toys "R" Us, Abercrombie & Fitch and Advance Auto Parts fell out of the ranking."

The top of the U.S. list:

  • Walmart (Brand value: $141 billion)
  • Target ($25 billion)
  • The Home Depot  ($22.9 billion)
  • Amazon  ($18.6 billion)
  • CVS/pharmacy  ($15.9 billion)
  • Coach ($14.6 billion)
  • Walgreens ($14.4 billion)
  • Sam's Club ($13.5 billion)
  • eBay ($10.9 billion)
  • Nordstrom ($10.1 billion)

Top Global Brands For Different Countries:

  • Lululemon (Canada)
  • Oxxo (Mexico)
  • Natura (Brazil)
  • Tesco (U.K.)
  • Carrefour (France)
  • Aldi (Germany)
  • Uniqlo (Japan)
  • Suning (China)
  • FairPrice (South East Asia, Singapore)
  • Lotte Department Store (Korea)
  • Woolworths (Australia)

For more:
- read the Chain Store Age article
- see the Best Retail Brands report
- check out the report's methodology

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