Woolworths and Coles have fallen from their once-celebrated positions as two of Australia’s most trusted brands. A new survey by Roy Morgan revealed that these supermarket giants now rank as the nation’s most distrusted brands. Woolworths took the top spot, dethroning Optus, while Coles followed closely in second place.
This significant drop in consumer trust highlights the ongoing dissatisfaction Australians feel towards the retailers, particularly amid rising living costs.
Distrust Reaches Record Levels
Roy Morgan’s October survey, involving at least 2,000 respondents, showed a dramatic shift in consumer sentiment. Woolworths dropped 239 places in the rankings, while Coles fell 237 places. This marked the highest levels of distrust recorded since Roy Morgan began tracking trust levels in 2017.
Michele Levine, CEO of Roy Morgan, explained the impact of distrust on consumer behaviour. “Distrust has a far more potent impact on consumer behaviour than trust,” she said. “While trust creates loyalty, distrust can drive customers into the welcoming arms of more trusted brands.”
The Fall from Grace
Just two years ago, Australians viewed Woolworths and Coles as two of the nation’s most beloved brands. The COVID-19 pandemic saw these supermarkets praised for their role in supporting communities during challenging times. However, as living costs continue to rise, consumers have grown increasingly frustrated with the retailers’ practices.
Shoppers have accused Woolworths and Coles of price gouging and misleading discounts. Many Australians now believe these companies prioritise profits over their customers’ welfare.
The Impact of Distrust
Levine described distrust as “a virus for brands.” She said Roy Morgan’s research shows consumers now hold brands to higher ethical standards, particularly after the pandemic. “Australians are holding brands to higher standards, and those that fail to meet these expectations face reputational consequences,” she said.
Professor Gary Mortimer from the Queensland University of Technology attributed the growing distrust to several factors, including transparency issues. “Willingness to provide transparent and relevant information is a key component in building and maintaining trust with consumers,” he said.
Mortimer also argued that food prices have become politicised. He noted that politicians often focus on food price inflation, attributing these increases to supermarket practices. “I feel that these ‘most distrusted brands’ results are an outcome of politicising food prices and specifically singling out two supermarkets,” Mortimer said.
Woolworths CEO’s Leaked Email Sparks Controversy
Woolworths Group CEO Amanda Bardwell addressed the distrust survey results in an email to staff. Bardwell acknowledged the company’s fall from grace and emphasised the importance of rebuilding trust with customers.
“I know that building back trust in our brand will take time and focus from all of us, especially as many customers continue to face cost-of-living pressure,” she wrote.
Bardwell praised employees’ efforts during the Christmas and summer period, noting their dedication to putting customers first. She said, “I want you to know that being the ‘most distrusted brand’ is not a reflection of how our customers feel about us when they shop in their local store.”
However, the email did not resonate well with all employees. A frustrated staff member leaked the memo online, accusing the CEO of gaslighting workers. The employee alleged that Woolworths’ corporate practices were responsible for the loss of consumer trust.
Legal Scrutiny Intensifies
The decline in trust coincides with increased scrutiny of Woolworths and Coles over their pricing practices. The Australian Competition and Consumer Commission (ACCC) launched legal action against both companies in September, alleging misleading discount claims.
Coles and Woolworths denied the allegations, calling the cases misconceived. The Senate inquiry into supermarket pricing is also investigating the issue, with a final report expected in late February.
Rebuilding Trust
Experts believe Woolworths and Coles must focus on rebuilding their reputations to regain consumer confidence. Mortimer suggested they should prioritise consistent pricing and low-cost promotions. He noted, “I think they’ll be working towards strengthening that brand trust again and reconnecting with their core consumers.”
Levine echoed the importance of ethical conduct and transparency. She said, “Australians expect more from brands today, and those that fail to deliver will face reputational challenges.”
Shoppers Demand Change
The distrust survey results have amplified calls for change among Australian consumers. Many shoppers have taken to social media to criticise Woolworths and Coles for their perceived profiteering. Some have vowed to support smaller, independent retailers instead.
As Australians continue to grapple with cost-of-living pressures, the demand for transparency and fairness from major retailers has never been higher. Woolworths and Coles now face the challenge of rebuilding trust and proving their commitment to serving their customers.
Conclusion
The fall of Woolworths and Coles from trusted favourites to Australia’s most distrusted brands underscores the fragility of consumer trust. With rising living costs and increasing scrutiny over pricing practices, the supermarket giants must work hard to win back public confidence.
In today’s environment, ethical conduct and transparency are no longer optional for brands. They are essential for survival. Woolworths and Coles have a long road ahead as they seek to rebuild their reputations and reconnect with Australian shoppers.