Product category:
Banking / credit / debt
News Release from: Motley Fool | Subject: Banking
Edited by the Insidemoneytalk Editorial
Team on 10 August 2007
Supermarkets poised to steal 17 million
current-account customers
Britain's "Big 4" supermarkets already take around ?20 of every ?100 that we spend in the shops [1].
But they may take an even larger slice of household spending Three out of seven (43%) Fool.co.uk readers (2) say they trust supermarkets to increase their range of value-for-money financial products
This article was originally published on Insidemoneytalk on 29 Mar 2007 at 8.00am (UK)
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Four out of five customers of the 'Big Five' banks are ready to leave for a smaller rival
One in five shoppers (20%) have a supermarket credit card One in ten (10%) have a supermarket savings account Just one in 200 people (0.5%) have a supermarket current account While three out of four people (75%) believe their supermarkets offer them value for money on groceries, almost half believe supermarkets sell value for money financial products too.
It seems that many of us deem that supermarkets can be as good at providing ISAs as they are at selling ice cream.
The survey also shows that 50% of consumers want supermarkets to offer more financial products.
Further reading
Two out of three customers are shackled to their bank, says Fool.co.uk
Independent personal finance website Fool.co.uk has found that almost two out of three people feel trapped by their banks.
Fool.co.uk comments on sneaky balance-transfer deals
David Kuo, Head of Personal Finance at Fool.co.uk, said: "It is disappointing, but not entirely surprising, to see credit-card companies sneak in higher charges.
However, some products could be left on the shelves.
For instance, only one in 300 people (0.3%) has put a supermarket mortgage into their shopping basket.
Meanwhile, only one in 200 people (0.5%) believe that supermarket current accounts are as good as their currant buns.
That said, retailers such as MandS, Sainsbury and Tesco have made significant inroads into credit cards.
One in five people (20%) own a credit card affiliated with a grocer.
The findings also revealed that both men and women were driven primarily by the best interest rates.
In a recent Fool.co.uk's Money Talk podcast (3), Brendan Cook, chief executive of MandS Money countered suggestions that supermarkets have already cherry-picked the easy-to-manage products.
He said: "Retailers are very good at knowing which products sell, and focusing their attention on those successful lines." David Kuo, Head of Personal Finance at Fool.co.uk, says: "Ten years ago supermarkets started with store cards and quickly expanded into credit cards, personal loans and savings accounts.
"Today, supermarkets are as clever at marketing travel-insurance policies as they are at selling travel sweets.
Additionally, with their low running costs, supermarkets can easily undercut other providers.
They are already pinching customers from banks and in time could steal even more.
"It is reckoned that over 40 million adults (4) in the UK have a current account.
This is a massive unpicked cherry for supermarkets to target.
If three out of seven shoppers switch their loyalty from banks to supermarkets, as many as 17 million bank customers could jump ship.
"As supermarkets wheel their trolley of growth along the aisles of opportunity, they are unlikely to let anyone stand in their way.
And, with millions of customers visiting the UK's four biggest supermarkets every week, banks will need to continually look at the products on their shelves to avoid being beaten to the check out.".
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