Supermarket chains in the United States are poised to enter the financial services arena, according to a new report from research company Celent Communications.
The new report, "Retail Grocers in Financial Services", reveals that in the past retail grocers have approached financial services very differently in North America than the UK, as a result of regulatory concerns. While British grocers have frequently taken an equity share in financial institutions, North American supermarkets, primarily in the US, have tended to simply rent space to bank branches.
This is all about to change, says Celent, with US grocers adopting new strategies to circumvent restrictive regulations and allow them to play a more active role in banking.
The report warns that 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. While banks' branches and brands keep supermakets' volume purchasing power at bay, Celent predicts that, in the next three to five years, grocers will increasingly benefit from the competition amongst banks wishing to link up with them.
Gwenn Bezard, author of the report, says: "Food retailers have turned into global giants with powerful brands, and have little choice but to move into financial services to fight the increasing pressure on food profit margins."