Australia’s two largest supermarket chains have taken a massive hit to their reputations — with even worse to come.

That’s according to research firm Roy Morgan, which said there were a few reasons for Coles’ and Woolworths’ “reputational crash”.

They include consumers’ perceptions they’re being price gouged during a cost-of-living crisis, “heightened media coverage of profit announcements” and the supermarket giants’ focus on “profits ahead of customers”.

Coles went from being Australia’s fifth-most trusted brand … to the ninth-most distrusted in one year, the research firm noted.

(Essentially, its ranking dropped by 221 spots!)

In contrast, Woolworths’ drop was not as dire (it went from second to 34th-most trusted brand).

“We have been tracking trust and distrust of brands in Australia for more than seven years, but we have never seen a reputational crash as dramatic as Coles and Woolworths – not even Qantas,” said Roy Morgan CEO Michele Levine.

“This is in direct contrast to the soaring reputational trust that they gained during the pandemic.”

“Sadly, this is just the beginning. Our data reveals even more dramatic reputational declines in the coming months.”

“Despite their plummeting trust and soaring distrust, both supermarket giants appear to be performing at the checkout, but trust and distrust measures are what we call ‘lead indicators’. In other words, they foreshadow what is to come.

“Woolworths’ share price, for example, has already fallen 22.5% since mid-June last year.

“Distrusted brands become fragile, making them targets for smart competitors like Aldi and other overseas competitors looking for new territories.

Ms Levine estimates that it will take at least two years for Woolworths and Coles to recover from their reputational woes, and that it will take more than just “PR and spin”.

And in case you missed it, a Greens-led Senate inquiry has backed calls for the major supermarkets to be slapped with hefty fines if they mistreat suppliers.

However, the Senators across the political divide have been unable to agree on the more contentious issue of whether to allow the Federal Court to break up supermarket monopolies.

For more, here’s the story by Jane Norman: