Brand Index: Ashley’s Sports Direct has found the sweet spot among shoppers
9 July 2014 2:32am
IN RECENT days, shareholders of Sports Direct have finally approved the retailer’s bonus scheme, after years of turning down the firm’s plans to reward founder and deputy chairman Mike Ashley.
This award that could potentially see Ashley and up to 3,000 employees share £200m in equity, as long as profits double by 2019.
Ashley himself possesses a reputation as a tough businessman and has had a colourful relationship with the City. However, Sports Direct’s share price has risen 30 per cent in the last 12 months, outshining and outlasting competitors.
As YouGov’s BrandIndex tool reveals, Sports Direct divides opinion, with consumers holding complex views about the brand. And yet, the same shoppers push the firm’s sales and profits higher every year. How does Ashley do it?
Since the start of 2014 the company’s average Buzz score, a measure of whether people have heard anything positive or negative about a brand in the last two weeks, has been -0.6, and at one stage bottomed out at -3.6.
This suggests that much of what the public hear about Sports Direct is negative – such the coverage over the company’s use of zero-hour contracts.
The brand’s reputation has even worse scores, coming in at an average of -10.8 since the beginning of January. The measure has fallen markedly in the last few months, from -7.0 in mid-March to -14.5 at the beginning of June. This coincides with some of the negative publicity around the company’s tussle with investors over its share awards.
Yet the most telling measure is steady and positive – the public’s purchase intent for the brand. Since the turn of the year, the average score is a +3.7, and even hit +5.1 last week. It seems that despite the negative publicity, the public still want to shop at Sports Direct.
Given affordability is still a major issue for many people, the brand places a premium on price and its Purchase Intent score and profits show that consumers like what it does.
In order to reach its lofty sales targets imposed by shareholders, will Sports Direct need to change its message to attract those who look for quality as the economic upturn continues or will it continue its current strategy that has worked so well to date? The brand’s incredible success to date suggests that whichever route it takes will be a successful one.
Stephan Shakespeare is the chief executive of YouGov
In other news
Greece’s interior minister has said that the country cannot afford its 5 June payment to the International Monetary [Read more]
Young people aged 16 and 17 years old should be given the chance to vote in a EU referendum, according to the [Read more]
The Bank of England is carrying out a confidential investigation into what would happen if the UK left the European [Read more]
This year's Eurovision Song Contest will feature an addition to the normal line up – for the first time ever, [Read more]
Tonight is the 60th Eurovision Song Contest, and once again we're in for an evening of cheesy music and crazy [Read more]
The Eurovision Song Contest is getting more and more expensive, despite Europe's decline into austerity. [Read more]
There were delays of up to 30 minutes to trains in and out of Kings Cross Station, after the station was re-opened [Read more]
When a 20-year-old footballer publicly declares he wants to leave a club and his agent hurls insults at one of [Read more]
The outbreak of bird flu in the US is leading to an unprecedented situation for companies reliant on eggs – [Read more]
Germany's finance ministry has denied reports it was considering offering Greece its own parallel currency. [Read more]
Chancellor George Osborne was given a boost today, as higher tax receipts helped shrink the deficit by more than [Read more]
Beleaguered spread-betting firm Plus500 today suspended trading in its shares on London's junior market, following [Read more]
The news that card and electronic transactions have overtaken cash as the UK’s preferred method of payment is [Read more]
Despite the crippling effect of election uncertainty, offers received in April were up 15 per cent on last year [Read more]
Former secretary of state for communities and local government Eric Pickles is to be knighted, 10 Downing Street [Read more]
Network Rail engineers have destroyed the Abbey Wood station as part of the Crossrail development that is expected [Read more]
The Championship looks set to once again be named the fourth most-watched league in Europe, following a seven [Read more]