JB Hi-Fi has bucked the decline of traditional retail in Australia as new research finds it has the strongest company reputation in the country.
The company has topped the 2014 Corporate Reputation Index with the highest ranking of all 60 companies measured in the annual report.
The report is part of a global study conducted each year by research consultants AMR in conjunction with the Reputation Institute.
JB Hi-Fi were closely followed by Australia Post, Mazda Australia, Toyota (which ranked first in 2013) and Nestle Australia.
One of JB Hi-Fi’s major competitors, the Good Guys, also fared well in this year’s results ranking sixth overall.
AMR managing director Oliver Freedman said the research demonstrated that while many traditional retailers were struggling to compete with online competitors, models applied by JB Hi-Fi and the Good Guys clearly resonated with consumers.
“These results show that if you get your model and product offering right, and you are seen as transparent, the reputation follows,” he said.
“We know that a strong reputation is crucial for consumer advocacy, which puts JB Hi-Fi in a strong position to compete with many online alternatives in the future.”
The research also shows that a number of large organisations are showing signs of difficulty in the area of reputation management; with both Ford Australia and Holden falling significantly in this year’s rankings.
Holden lost its place in the top 10 companies, dropping 25 places to rank 35th overall this year.
Ford fell from 20th in 2013 to 49th in this year’s list.
Freedman said it was clear that decisions taken by both Ford and Holden about the future of vehicle manufacturing in Australia had a serious impact on their overall reputations.
“The fact that Holden also ranked poorly in the individual measurements of Governance, Leadership and Performance is further evidence that its overall reputation suffered seriously as a result of its decision to pull out of local manufacturing,” he said.
Freedman said other company reputations that have suffered as a result of decisions related to local manufacturing include Coca Cola Amatil; its overall ranking fell from 28th last year to 45th this year.
While its financial performance was rated strongly by Australians, it was viewed as having poor levels of leadership, citizenship, governance, and workplace, he said.
“This fall can be directly traced back to the company’s decision not to support SPC,” he explained.
“Australians clearly have a strong view on how and when companies should support local manufacturing, and any decision to take that manufacturing off-shore has serious consequences on reputation.”
Freedman also said companies needed to ensure their reputation remains strong year on year to ensure that issues don’t affect overall public perception.
“A strong reputation built and maintained over a long period of time means companies can ‘weather the storm’ of any issues that might arise,” he said.
“However, this does not mean that organisations can repeatedly use this goodwill over and over without some consequence.” Freedman cited Qantas as an example of this.
The airline dropped from 13th in 2013 to 26th in 2014, linked directly to its decision to retrench local workers.
It also ranked in the bottom five for the individual measurements of workplace, leadership, performance and innovation.
“The announcement of Qantas’ redundancies shouldn’t have had such a serious impact on the airline’s overall reputation, but the company used up a lot of goodwill when it shut the airline down several years ago,” he said.
Freedman said companies in the media sector also suffered this year, as they battle to find relevance in an increasingly digital sector.
News Corp Australia fell from 55th last year to take bottom place (60th) in the 2014 rankings.
Similarly, Fairfax dropped from 49th last year to 57th this year. Both organisations now rank below the Australian Tax Office for overall reputation.
AMR is part of STW Communications Group, Australia's leading marketing content and communications services group.
The data for the index was collected from February 20 to March 21, 2014.
Respondents aged 18-64 were interviewed as part of the study and results were weighted to the general population using several demographic and socio-economic variables.