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Written by Stefan Van Rompaey
In this article
  • Companies MakroWPP
  • Topics Marketing
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Analysis – Decline of Makro was predictable, other retailers at risk too

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Food6 December, 2022
Shutterstock.com

Makro‘s demise was not unexpected: the brand was worn out, having lost 60 % of its loyal customer base since its peak in 2004. But other retailers are showing similar symptoms of illness…

Well known, not relevant (anymore)

“When you compare Makro to other super- and hypermarkets, consumers consider the brand to be ‘tired’. Makro is a well-established brand that can still count on a certain appreciation, but it lacks distinctiveness.” That is the hard conclusion Johan Hellemans of WPP Belgium bases on data from the Brand Asset Valuator (BAV for short), WPP’s measuring instrument that measures brands on four pillars: differentiation, relevance, appreciation and knowledge.

The conclusions are hard, but hardly surprising: “Makro is well-known, but not relevant (anymore). The things that consumers do know about the brand, are vague and unclear. In this case, brand awareness does not provide a competitive advantage. To resonate with consumers again, the brand should have clarified its essence. Makro is very vulnerable to (new) competitors that can deliver the same thing in a more distinctive way.”

Lost customers

In 2004, Makro was at its peak as a brand, it seems. From 2012, the brand lost its ability to grow, and from 2016 it lost status. During the pandemic, the brand lost its significance altogether. And then things go downhill fast, Hellemans shows: the number of lost customers is double the average standard in the market. The number of people who visit the shop regularly, has dropped by two thirds. And even for established brands, repeat customers are essential for a sustainable business.

Makro is chosen as a favourite brand 2.5 times less often than the average brand within its category. Only 21 % of consumers express some love for Makro, compared to 31 % as the sector average for hypermarkets, supermarkets and convenience stores. Makro scores below the sector average on all criteria, while in 2004 the brand still scored better than many competitors.

Similar profiles

“Makro scores low on such characteristics as being popular, original, trendy, up to date… The brand lacks ‘panache’. In ten years, Makro went from a popular, up-to-date and reliable brand to an unapproachable and distant, old-fashioned brand”, Hellemans concludes. Are there brands with a similar image profile in the market today? “There certainly are: Cora and Match, for example, but we also find similarly perceived brands within other sectors, such as Lukoil and Scarlet.” Whether they will run into similar problems depends on more factors than brand image alone, but they are warned now.

Carrefour and Aldi also have similarities – after all, there is also a category effect – but they still manage to differentiate themselves in other areas and can fall back on a strong customer base, which had eroded away at Makro. “In the current market, the main thing is to stay on top, so that competitors do not eat away at your customer base. We therefore advise clients to question their positioning and strategy more quickly and make adjustments if necessary.”

Do you also want to discover how shoppers view your brand? With the BrandAsset Valuator, you can find out everything you need to know about brands, consumers, market trends and much more. Moreover, the comprehensive report tells you how strong your brand really is in the market, or how much work remains to be done.

Order your brand report now to find out
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Makro's demise was not unexpected: the brand was at its peak in 2004 and has since lost 60 % of its loyal customer base. But other retailers are also showing similar symptoms of distress...

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