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Are supermarkets a threat to banks?

10th February 2014 Print

Many supermarkets are now routinely offering a range of banking and insurance products and they’re clearly here to stay as part of the financial landscape.

Through having numerous frequent shoppers in-store or online they have significant opportunities to market their financial products and it’s interesting to note that supermarket bank customers typically spend more in that supermarket’s stores.
In many cases their financial products offer point schemes or discounts designed to further engender customer loyalty:-
M&S Bank (discounts/vouchers at M&S stores);
Sainsbury’s Bank (Nectar points);
Tesco Bank (Clubcard points/discounts).
Some of the supermarket bank products are no strangers to the best buy tables either with current incumbents being unsecured loans (for the most competitive loan amounts of £7,500 to £15,000: Sainsbury’s Bank are offering 4.7% APR and Tesco Bank 4.9% APR) and for 0% introductory purchase rate on credit cards (18 months available from Tesco Bank).
Consumer Intelligence also expect Tesco’s launch into the current account market later this year to have significant impact but it will clearly depend on the product offering.