Woolworths and Coles have fallen so far in the minds of consumers their reputational crash has surpassed that of Qantas, Roy Morgan CEO Michele Levine says.
In December 2023 – six months ago – Coles was ranked Australia’s fifth most trusted brand. On a 12-month rolling average to March, it has fallen 221 places to become Australia’s ninth most distrusted brand.
Woolworths’ lot was not as grim but certainly not great, falling 32 places from being Australia’s second most trusted brand in December to 34th in March.
Levine said the top reasons for the crash centred on “price gouging/tricky pricing” and a “focus on profits ahead of customers”.
“We have been tracking trust and distrust of brands in Australia for more than seven years, but we have never seen a reputational crash as dramatic as Coles and Woolworths – not even Qantas.
“Sadly, this is just the beginning. Our data reveals even more dramatic reputational declines in the coming months,” Levine said.
She said measuring distrust is what matters because it forms when we feel foolish that we trusted too much.
Where the supermarkets sit now with consumers is in direct contrast to the soaring reputational trust they gained during the pandemic. Seen as leaders that recognised it was a national crisis and consistently did whatever was needed to keep stores open and consumers safe as possible, paid a handsome trust dividend.
“After lockdown, Australia emerged to a very different economic environment, and in my view, the major supermarkets failed to recognise the exploding cost-of-living pressures as a genuine crisis, and now they’re paying the price.
“Despite their plummeting trust and soaring distrust, both supermarket giants appear to be performing at the checkout, but trust and distrust measures are what we call ‘lead indicators’. In other words, they foreshadow what is to come.
“Woolworths’ share price, for example, has already fallen 22.5 per cent since mid-June last year. Distrusted brands become fragile, making them targets for smart competitors like Aldi and other overseas competitors looking for new territories,” she said.
Levine added that Roy Morgan maps recovery times for companies that have suffered a severe reputational crash – Qantas, Optus and Medibank data breaches for example.
“Our best estimate for the two supermarket brands is at least two years, and only if they can develop and execute a data-driven recovery strategy that is built on much more than PR and spin.”
