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JB Hi-Fi has strongest corporate reputation in Australia

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JB Hi-Fi has strongest corporate reputation in Australia; regains top spot

 

May 9, 2016 While many traditional retailers struggle to compete with their online-only counterparts, JB Hi-Fi has once again demonstrated it has gained the confidence of Australian consumers, with an annual report showing it has the strongest corporate reputation in the country.

Released this week, results of the 2016 Corporate Reputation Index show that JB Hi-Fi ranked highest amongst the 60 companies measured, climbing two places from 2015. It is the second time in three years it has taken line honours in the Index; it previously ranked 1st in 2014 and was 3rd overall last year. The retailer ousted Toyota (which ranked 1st in 2015), and Samsung respectively to rank highest for its reputation according to the research, which is part of a global study conducted each year by leading research consultants AMR in conjunction with the Reputation Institute[1]. In addition to measuring overall reputation, the study also measures how Australians feel about each company on the seven individual drivers of reputation; Products & Services, Innovation, Workplace, Citizenship, Governance, Leadership and Financial Performance, and ranks them accordingly[2]. Harvey Norman also saw an improvement increasing from 26th last year to rank 20th overall this year. However, not all retailers showed similar improvement in the 2016 Index; one of JB Hi-Fi’s competitors, The Good Guys, slipped from 12th place in 2015 to rank 16th overall in 2016. It previously ranked 6th in 2014. Myer’s reputation remained static ranking 21st overall for the second year running.

AMR’s Managing Director Oliver Freedman said the research showed that Australian consumers not only rated JB Hi-Fi’s products and services highly, but felt it was a good corporate citizen that treated its employees well. “This research shows that respect for an organisation is developed well beyond the perception of getting a good deal in a retail environment,” he said. “Being a responsibly-run company that is open and transparent, and treats its employees well is also vitally important to Australians when it comes to overall reputation.”

Freedman said one of the companies to show strong improvement over recent years is Qantas, which jumped five places to rank 4th overall this year. This follows a steady improvement for the national carrier after several industrial disputes; it rose 17 places from 26th in 2014 to rank 9th overall in 2015. Its most recent result puts it well ahead of Virgin Australia, which ranked 11th overall (up four places from 2015). “Qantas has clearly worked hard to regain trust following its shut-down and other industrial issues which saw the carrier face what we call a ‘reputational crisis’. However, it has clearly taken successful measures to rebuild that reputation among Australians, who not only trust and admire the organisation, but have also recognised improvements in the individual dimensions of Innovation, Governance, Leadership and Performance,” Freedman explained.

Woolworths showed the biggest fall in overall reputation in this year’s Index; down from 17th overall in 2015 to rank 40th in 2016. Freedman said the change could be attributed to public awareness of financial issues, including the future of the Masters brand, teamed with ongoing public discussion about whether it was losing the battle against Coles and Aldi. “Woolworths has really struggled in the individual measurements of Leadership and Financial Performance in particular this year,” he said. “In the past its overall financial performance helped maintain a strong reputation. But once this started to decline, there was not enough reputational capital to avoid a very large loss of trust among the Australian public.”

Another organisation to slip significantly in overall rankings this year is Australia Post. It fell from 6th overall to rank 19th overall, the first time it has fallen outside the top 10 since 2009. Similarly, it seen significant falls across all individual dimension measurements over the past seven years. For instance in 2009 it ranked first for Citizenship but fell to 26th for the same measurement this year. It ranked 2nd for Products in 2009 but fell to 42nd in 2016. “Australia Post is facing some serious issues with its reputation. In particular, our research shows they now rank very poorly in the specific areas of Leadership, Financial Performance and Products, where just three years ago they ranked well in those areas. The community gave them a substantial amount of time to future proof the business, show clear evidence of their innovation and vision, but the reputational capital Australia Post built over many years now appears to have diminished, and the increase of stamps to $1 appears to have been a tipping point among some consumers polled.”

Banks: Freedman said while the financial planning sector had been managing multiple issues with allegations of inappropriate advice, and calls from cross-party Senators for a public inquiry, the crisis did not seem to be affecting how Australians viewed our banking sector overall. While some banks, including Bendigo & Adelaide Banks and CBA recorded a drop in their overall reputation rank, other banks saw rises, including NAB, Westpac, and Citibank. Several other banks saw their reputation either stay stable, or only move slightly from 2015, such as ANZ, ING, and Macquarie Bank. “All four major banks now rank outside of the lowest Tier – that is they rank 45th or higher,” Freedman said. “While the allegations are of course of great concern, they do not seem to resonate with most Australians as issues likely to affect the banking sectors reputation overall.” Freedman said that year on year tracking of the reputation of the Banking industry as whole also showed that it has remained relatively stable since October 2013, with little movement shown in the past six months.

Other results:
• While Apple’s reputational decline has stabilised – moving from 11th last year to 9th this year –concerns over its Governance and Citizenship continue to grow, with the company falling significantly on both individual measurements, which suggests their reputation remains at high risk
• 7-Eleven fell 20 places to rank 56th overall following its pay scandal. Freedman said given its reputation prior to the issue, a crisis of the magnitude faced recently is expected to have an immediate effect but also one that may be long lasting
• Hyundai Australia rose 13 places to rank 15th overall, demonstrating that it is starting to compete with Toyota and Mazda on reputation and trust. However, the automotive company still ranked quite low on the individual measurement of Citizenship, which Freedman said could present them with an opportunity for further improvement
• Nestle Australia fell out of the top 5 (ranked 4th overall in 2015) to rank 12th overall this year
• Vodafone continues to show a slow recovery in its reputation score, up only two places to rank 55th In 2009, it ranked 24th and was well ahead of both Telstra and Optus.
AMR is part of WPP AUNZ. Ends

About the Reputation Index: The 60 companies included in the Reputation Index are sourced from the IBIS World Top 2000 Company list, which ranks companies by revenue. Other major reputation or Corporate Responsibility studies conducted in Australia use a self-rating system; the companies being analysed voluntarily provide the data, which can then be audited. However, the Reputation Index is different because it collates insight direct from consumers, and does not rely on any information provided by the companies being studied. In addition to collating overall reputation, the Reputation Index also measures how Australians feel about each of the 60 companies according to seven parameters; Products and Services, Innovation, Workplace, Citizenship, Governance, Leadership and Performance. Adults aged 18-64 are surveyed as part of the Reputation Index in Australia, with results weighted to ensure they represent appropriate gender and age groups. About AMR: One of Australia’s leading research consultancies, AMR regularly conducts reputation studies on corporations, countries and cities. AMR gathers in-depth data and provides insight into reputation, and how it is measured and valued both in Australia and across the world. AMR is part of WPP AUNZ. [1] The Reputation Institute is the leading international organisation dedicated to advancing knowledge about corporate reputations. Founded in 1997, the Reputation Institute has been a pioneer and global leader in the development of measurement tools and counsel to leading corporations around the world. [2] n=7,457, data was collected online between 22 February – 21 March 2016 with results weighted to be representative of the Australian population 2016 Corporate Reputation Index – Overall Rankings:

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