Daily Banking Industry News
Tuesday 13th of July 2010

Banking Sectors:

By company:

By organisation:


Also see:

May 12, 2009

Supermarkets well placed to compete with banks

by Gill Montia

Story link: Supermarkets well placed to compete with banks

Defaqto is convinced that supermarkets such as Tesco could be in a strong position to compete with High Street banks, once existing personal finance offerings are expanded to include current accounts.

In a report entitled Retail Banking: Challenging Times, the financial analysts suggests that brand recognition leaves supermarkets well placed to enter into the full banking service market.

The report’s author, David Black, comments: “Supermarkets generally enjoy impressive customer image, brand recognition and the trust of their customers. This coupled with the fact that a member of just about every household has to physically visit a grocery store or its internet site, at least once a week cements the potential attraction.”

Mr Black adds that a further incentive could be the ability of supermarkets to cross-subsidise as the UK moves into a period when banks will have to charge fees for current accounts.

For example, a retailer could offer free full-service current accounts to customers who spend a certain amount in-store each month, effectively locking-in customers to buy the majority of their groceries with the supermarket, while at the same time encouraging people to open a current account.

Tesco Personal Finance already has plans to open bank branches in 30 stores by the end of this year; the retailer expects to launch a current account in 2010 and possibly expand into mortgages in the years ahead.

Meanwhile, Boots recently revealed that it is considering a move into personal finance as it seeks new areas of business that will increase sales across its 2,600 UK retail outlets.


Related stories to Supermarkets well placed to compete with banks:

Investment Banking News

Investment Banking Newss
UK banks alleged to have mis-sold mortgage-backed securities

Borrowing & Lending News

Borrowing & Lending News
Consumers gain improved access to credit reports

Financial Reports News

Financial Reports News
Kent Reliance BS and JC Flowers work on cash injection