Could supermarkets soon take over current accounts market?
September 21, 2007
There was a time when supermarkets were only used for the purchase of groceries and household goods, but all of this has changed over recent years.
Many leading supermarkets in the UK have really branched out over recent years, and have started offering an array of financial products and services, such as insurance services, loans, and credit cards, amongst others. Many offer savings accounts as well as banking services, providing the consumer with far more choice when it comes to finding the best financial products and services.
A recent survey has revealed just how popular supermarket financial services have become in the UK, indicating that one in every ten consumers has a supermarket savings account, and one in every five shoppers holds a supermarket credit card. The figures show just how much business supermarket giants such as Asda, Tesco, and Sainsbury’s have taken away from the major banks in the UK. Figures also indicate that if supermarkets decide to branch out further they could take away far more business from banks.
According to the results of the survey around half of consumers in the UK would like to see supermarkets branch out and offer more in the way of financial products, as most think that supermarkets can offer far better value and service on such services and products. Current accounts seemed to be of particular interest, and although only one in every two hundred consumers has a supermarket current account at present, if more supermarkets offer this facility they could end up with close to half of the 40 million current accounts in operation in the UK today.
One industry expert stated: “This is a massive unpicked cherry for supermarkets to target. 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.”
Alan Wright
21st September 2007
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