M&S profits may be down but it's still Britain's most respected firm

Published on Wednesday 3 June 2009 22:04

THIS is not just any old high street chain. This is a high street chain with the best reputation in Britain.

As it celebrates its 125th year of trading, Marks & Spencer was named the UK's most reputable company yesterday, in a major study of the country's top firms.

The company beat big names ranging from Cadbury's to pharmaceutical giant Smith & Nephew in the reputation study.

Marks & Spencer saw its pre-tax profits fall by 104 million in the first half of the year but has benefited, under the stewardship of executive chairman Sir Stuart Rose, from a recent advertising campaigns featuring Twiggy and Myleene Klass.

The stock exchange's top 140 listed companies were studied by consultancy firm the Reputation Institute, which rated firms in categories including service, ethics and innovation.

Supermarket chains Sainsbury's and Morrisons both made the top ten, while the country's biggest retailer, Tesco, was placed only 22nd. Rolls-Royce and Tate & Lyle also made the top ten.

More than 5,000 adults were asked to measure feelings of trust, esteem, respect and admiration for the 140 firms in the UK list. The Nationwide Building Society was the only purely financial institution to make the top 50, reflecting the public mood following a year in which the reputation of the banking industry has been shattered.

Seamus Gillen, managing director of the Reputation Institute, said: "The most telling finding is that, next to delivering strong products and services, consumers want companies to act transparently and ethically.

"We are clearly seeing the reaction to the way in which banks in particular have let people down, and destroyed public trust."

Consumers said Marks & Spencer was seen to have the best workplaces and ethics. Tesco was most admired for its impressive sales performance.

Satellite and mobile phone systems group Inmarsat, which is perhaps the least well-known of the top ten, had the best reputation for innovation, said the institute.

The study said reputation was vital to businesses because it led to word-of-mouth recommendations, which often carry more weight than advertising alone.

Professor Paul Freathy, a marketing expert at Stirling University, said brand strength allowed companies to expand.

"If you look at a company like Tesco, 30 years ago you would have gone in and bought branded items such as Colgate toothpaste from them," he said. "What you have now is Tesco's own items, such as paracetamol, vitamin C tablets and sun cream, which people trust enough to put on their skin or in their mouths, which is the test of a strong brand.

"This trust has given the brand enough leverage to move into non-traditional areas such as financial services, electronics or jewellery.

"Brands as strong as Tesco or Marks & Spencer can say, 'You know who we are and what we stand for', and then take customers into non-traditional areas."