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Low-cost Retail – rising from the Canadian Economy’s ashes

25 July 2016
This article is more than 4 years old.

· Canada’s 100 most valuable brands have a total value of C$200 billion

· Couche-Tard and Dollarama increase in brand value amidst weakened economy

· Air Canada’s brand value soars 88%, making it the fastest growing brand

· Royal Bank of Canada takes the lead as the nation’s most valuable brand

Every year, leading branded business valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test. They are evaluated to determine which are the most powerful and the most valuable by country, by industry and against all other brands worldwide. Canada’s most valuable brands can be found in the Brand Finance Canada 100.

Canada’s 100 most valuable brands generate a total brand value of C$200 billion. With 21 brands in the table with a total value of C$30.1 billion, the retail sector claims the title as the industry with the most brands in the table. The Oil and Gas industry follows closely behind with a total of 14 brands, contributing C$21.7 billion to the nation’s overall brand value.

The winners amidst the nation’s weak economic condition are undoubtedly the low-cost retailers. Consumer confidence has been affected by the weakened economy, decreasing oil prices, and a slightly elevated unemployment rate – approximately 7%. The increase in price-conscious consumers in light of the economic slowdown has meant that low-cost retailers are able to compete with companies positioned in a higher price bracket. Alongside consumer prudence, Couche-Tard’s revenue forecasts have improved this year, which largely contributed to the brand’s 39% rise in value. Dollarama saw the same forecast, which was a factor that led to its impressive 20% growth in brand value.

Air Canada is the nation’s fastest growing brand, its value rising 88% to an overall brand value of C$1.8 billion. Due to the decline in fuel prices, it propelled the airline giant’s second quarter profits up 33%. As the nation suffered a depreciation in its currency, the cost of commodities priced in U.S. dollars soared, however, the economic hiccup boosted the airline’s passenger revenue by 6.9%. Additionally, external tourism contributed to Air Canada’s success this year when US dollars were exchanged into the depreciating Canadian dollar. The brand cut costs in areas of its operations to offset the depreciation, and this combatting strategy proved useful for the brand’s value overall.

Royal Bank of Canada retains its title as the nation’s most valuable brand despite falling 9% in value to C$13.2 billion. Banking brands have dominated the Canadian table – five banks are in the top 10 alone. The banking industry has been subject to regulatory pressures and tough economic conditions, and the weakening Canadian dollar, therefore it is important to commend Canadian banks for maintaining strong positions in the table this year. The overall brand value of banking brands in the table is C$56.5 billion, making up approximately 30% of the nation’s total brand value. The Canadian banking system is widely considered one of the safest banking systems in the world. Yet, six of the nine banking brands in the table have fallen in brand value this year. However, this fall is consistent with the global trend and therefore does not necessarily impugn the level of safety Canadian banks are renowned for.

ENDS

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Konrad Jagodzinski
Konrad Jagodzinski
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Florina Cormack-Loyd
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