Would you join your local supermarket bank?
We are all used to popping to the supermarket every week or so to go and get our groceries and household goods, but when it comes to doing our banking most of us are more used to heading to the High Street, picking up the phone, or getting online to make transactions.
However, thanks to one leading UK supermarket chain many people may be able to combine their banking transactions and financial management with their weekly or monthly shop, as the supermarket giant prepares to enter into the world of banking.
Tesco, like many other major supermarkets, has diversified enormously over recent years, and aside from selling what one would expect, such as groceries and household goods, it has been selling financial services and products such as insurance products, credit cards, loans, and other services and products for some years. However, the supermarket giant has now become the first of all the major UK supermarkets to take on the big High Street banks at a particularly turbulent time – and industry experts reckon that it will enjoy great success and give the High Street banks a real run for their money.
The supermarket it planning to open around thirty in-store branches of its own bank, Tesco Bank, over the course of this year, with around three to open next month in Coventry, Bristol, and Blackpool. Consumers will now be able to manage their finance and conduct their banking business whilst going to the supermarket for their regular shop, which for many will mean increased convenience, ease, and speed. In addition to opening these in-store branches by 2009, Tesco plans to start offering current accounts to customers by 2010, offering a full service bank for those that are looking for a change from traditional banking.
Industry experts have identified a number of reasons why the supermarket is likely to enjoy great success with its banking services.
First of all, many consumers have lost faith in the traditional High Street bank over the past year or two, largely because of the turbulence and problems that have stormed through the banking industry, and this means that more people will be receptive to the thought of having banking services through a well known supermarket that has been a household name for many years.
Secondly, Tesco is the first of the leading supermarkets to offer these facilities, and as such is likely to be able to offer highly competitive deals compared to its rival banks. Finally, the supermarket will be able to market its banking services like no other bank, as it sees millions of customers come through the doors every day to do their shopping, providing the perfect environment for marketing the new business.
Tags: finance, current account customer, selling financial services, going to the supermarket, supermarket bank, world, Tesco Bank, accountOne industry official said: ‘This would be a major threat to banks as the current account is the key ingredient for each bank’s relationship with its personal customers. Many banks increasingly concentrate the majority of their cross-selling initiatives on their current account customer base.’
He added: ‘Tesco, with its huge market share and brand image for groceries, has the distinct advantage that many people have to visit either its stores or its internet site on at least a weekly basis, which gives it a huge marketing advantage. This factor means that it will be very much easier for it to build up market share than for other new non-supermarket entrants in the provision of current accounts.’
