14 June 2024
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Who are the most trusted and distrusted businesses in Australia?

Peter Switzer
7 June 2024

The revelation that Bunnings is the most trusted business brand in the country and that Woolworths, Coles, Qantas, Optus and others are seriously distrusted underlines the truth in Abraham Lincoln’s famous observation that “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time”.

The businesses we don’t trust have shown themselves to be self-interested and not considerate of the people we’ve been taught should be ‘kings and queens’ of any successful business — the consumer!

Every year Roy Morgan surveys Australians to see what businesses we trust. This is how the company headlined their findings: “It’s official: Bunnings has again been crowned the most-trusted brand in the 12 months to March 2024 after returning to the top spot in the final quarter of 2023.”

Anyone who has seen the line-up for sausages at Bunnings on a Saturday morning wouldn’t be surprised that this business tops the most trusted brand list but who would’ve tipped the fall from grace for Woolworths and Coles?

While Bunnings “…has increased its lead as Australia’s most trusted brand, [the] previous leader Woolworths, plunged from second spot in the last report, down 32 places to 34th most trusted overall.” Meantime, “…Coles has continued its fall from grace, down from the fifth most-trusted brand in the 12 months to December 2023 to the ninth most-distrusted brand in the current rankings – an unprecedented fall of 221 places in the rankings.”

In contrast, Aldi, which is renowned for being price competitive and is an old-fashioned kind of retailer, is now Australia’s second most-trusted brand, marginally ahead of discount department store Kmart in third place.

Hold that thought about Kmart because when you add its third place to Bunnings first place, it says something about the listed company that owns the pair — i.e., Wesfarmers. Ahead of my take on this company, let’s look at the top 10 trusted and distrusted brands.

When you look at the trusted versus the distrusted, you have price cutters versus price gougers. Meanwhile, Apple, Toyota and Samsung are reliable businesses that consumers commit to on a daily basis with their phones and laptops, and they have created loyalty with customers and are known as love brands.

I do suspect Apple does get a lot of money off their beloved customers but when something delivers happiness via email, the internet, music, movies and streaming services, the Warren Buffett rule clearly applies: “Price is what you pay, value is what you get”.

The opposite applies to the distrusted brands, who have shown themselves to be inconsiderate of customers during a surge period in the cost of living. And Roy Morgan CEO Michele Levine sums it up neatly this way: “The fate of Woolworths and Coles reveals how quickly distrust can gain momentum and negatively impact a brand’s reputation. There’s an old Dutch saying that trust arrives on foot but leaves on horseback. In other words, trust is slow to win but quick to lose.”

‘The results serve as a salutary reminder for Bunnings, which has retained high levels of trust based on extensive goodwill and reputational strength combined with a fairly stable, and minimal, level of distrust.’

Australians’ distrust for companies has grown significantly in the last year as cost-of- living concerns and high inflation have increased concern about companies being motivated by high profits and corporate greed, excessive price hikes, dishonesty and not being focused enough on putting the customer first.

Roy Morgan surveyed individuals and the theme that was often repeated was that the distrusted brands “put profit before people.”

But you have to ask this: does a business making profits at the expense to customers help the share price? Well, Wesfarmers owns Bunnings and Kmart, so let’s look at its share price over the last five years to take in the period of the pandemic, lockdown and 13 interest rate rises.

Wesfarmers

Over that time, Wesfarmers’ share price has gone from $37 to $66 in round figures. Now look at Woolworths share price, which has gone from $26 to $32. And look at the period when interest rates were rising and you see Wesfarmers went from $41 to $66, while Woolworths fell $34 to $32, but from the 2023 peak in its share price the fall has been around 20%.

Over that same time, Wesfarmers share price rose around 38%, which tells you a lot about how there is a reward for loving your customers.

Amongst this story is a big lesson for company CEOs and chairmen.

Over the years I learnt that Wesfarmers had a reputation of bringing on great CEOs from within the business and people like Trevor Eastwood, Michael Chaney, Richard Goyder and now Rob Scott. All had early experience working for Wesfarmers. I can recall how Richard Goyder was seen as a champion of business when he headed up the company.

In fact, he would come on my TV show even when the results weren’t great, which to me was a sign that he respected his shareholders.

Ironically, he was chair of Qantas in recent years and failed to lead Alan Joyce effectively, which tells you how important a culture of a company is. I don’t think Goyder could have led badly at Wesfarmers because the culture would not have allowed it.

Of course, Qantas once had a great culture and was a love brand, and you can only hope that this business and others on the distrusted list learn to win us back over.

However, that will require these organisations to stop taking and start giving back to the customers who they have lost.

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