Retail Grocers in Financial Services

October 15, 2001

Abstract

 

New York, NY, USA Paris, France October 15, 2001

: North America & UK Overview

Celent reveals grocers will increasingly benefit from direct channels and the competition amongst banks wishing to link up with them. Celent predicts that a majority of top grocers will create new alliances with national and international banks, moving away from the regional partnerships currently in place.

In a new report entitled " ", Celent Communications scrutinizes the leading strategies in supermarket banking in North America and in the UK. The report benchmarks the experiences of North American and British grocers in financial services, and examines how direct channels have cleared the way for new supermarket banking ventures.

Due to regulatory concerns, retail grocers have approached financial services very differently in North America than the UK. While British grocers have frequently taken an equity share in financial institutions, North American grocers, primarily in the US, have tended to simply rent space to bank branches. However, new strategies, circumventing restrictive regulations, will allow US grocers to play a more active role in banking. As more and more supermarkets link up with banks, local and regional banks in the US run the risk of being displaced from their existing in-store branching agreements. “In North America as in the UK, grocers act as Trojan horses for banks expanding into new geographic areas” comments Gwenn Bézard, the author of the report.

While banks’ branches and brands keep grocers’ volume purchasing power at bay, Celent predicts that, in the next 3 to 5 years, grocers will increasingly benefit from the competition amongst banks wishing to link up with them. “Over the past few years, the buzz about the Internet has obscured how the grocery retailing industry has changed. Food retailers have turned in global giants with powerful brands, and have little choice but to move into financial services to fight the increasing pressure on food profit margins”. While the impact of grocers on financial services is still modest, Celent expects grocers’ footprint in financial services to increase, thanks to their powerful brands, their sales culture, and the commoditization of banking business and products.

A Table of Contents is available online.

 

 

of Celent Communication’s Retail Banking and Retail Securities & Investments research services can download the report electronically by clicking on the icon.

 

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

 

New York, NY, USA Paris, France October 15, 2001

Return to Abstract

EXECUTIVE SUMMARY 3
INTRODUCTION 5
THE LANDLORD MODEL IN NORTH AMERICA 7

 

In-Store Branching Keeps Growing

7

 

Supermarket Banking Hurdles

13

 

New Strategies Revamp the Concept

15

 

Key Challenge of New Model

20

THE UK SHAREHOLDER MODEL 22

 

Key Shareholders

24

 

Direct Model

26

 

Specialist Providers

28

 

Exclusive Partnerships

28

 

Limits of the Model

29

CONCLUSION 35

 

        

 

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