Trusted retailers benefit from Australia's economic growth but living with covid could be different, according to Roy Morgan CEO
Harvey Norman has been the biggest loser in the latest Roy Morgan trust survey, skidding as other retailers benefited from record GDP 9.6 per cent growth for the year and maintained their trusted positions.
The latest quarterly figures show Australia's four most trusted brands - Woolworths, Coles, Bunnings and ALDI - held tightly to their first to fourth rankings. The most upwardly mobile retailers on trust ladder during the June quarter included Kmart, which is now in the top five, and Myer and Big W, which both entered the top 10 most trusted brands. Target also jumped seven rungs of the trust ladder to land just outside the top 10.
On the other side of the coin, in the least trusted ranks, Harvey Norman moved into Roy Morgan’s list of Australia’s top 20 most distrusted brands, joining Amazon, Crown Resorts, Google and Twitter.
Roy Morgan CEO, Michele Levine, put this down to the public’s awareness of Harvey Norman having benefited from $22 million in JobKeeper wage subsidies despite the retailer’s record pre-tax profit of $1.18 billion for the year - an increase of $521m from the previous year.
“It appears pressure on the company has had an impact though, with the company just this week deciding to repay $6 million of JobKeeper wage subsidies,” Levine said. “But will this concession prove too little too late for Harvey Norman to rebuild the trust they have lost during this period?”
Read more: Most-trusted brands during Covid 19 lockdown revealed
Levine saw government reactions to the pandemic working in most retailers’ favour in the past. However, the latest Sydney and Melbourne lockdowns, coupled with the shift towards Australia having to ‘live with Covid’, will challenge retailers from now on, she said.
“Australians prevented from travelling and enjoying live entertainment redirected their spending to the retail industry,” said Levine. “The latest lockdowns in NSW, Victoria and the ACT are set to end when vaccination rates in these states reach targets of 70 per cent and then 80 per cent of the adult population fully vaccinated. This is a big difference from prior lockdowns as Australians will be ‘living with COVID’ for the first time when these lockdowns end.
“This new ‘COVID-normal’ will provide a challenging environment for retailers that rely heavily on personal interactions between staff and customers. The big question facing retailers is how they manage the questions of ‘vaccination mandates’ for staff and ‘vaccination passports’ for customers without destroying the trust they’ve built up over the past year."
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