Kroger (KR) expands banking business -- others to follow?

Posted Sep 17th 2007 10:49AM by Zac Bissonnette
Filed under: Launches, Competitive Strategy, Wal-Mart (WMT), Marketing and Advertising, Kroger Co (KR)

With Wal-Mart (NYSE: WMT) making a big push into the financial services space, it's no surprise that competitors are attempting to follow the world's largest retailer. Grocery-giant Kroger (NYSE: KR) offers mortgages, home equity loans, and insurance, including policies covering pets!

These ventures into financial products make sense. Grocery stores enjoy tremendous traffic (who doesn't go to the grocery store?), but very low margins. Getting consumers to at least look at other products while they're there is a good way to increase sales and, hopefully, give margins a nice little pop.

In addition, the convenience factor may give these grocery-store owned banks/financial service companies an opportunity to sell products at prices that aren't necessarily the best value. That's certainly been my experience. While some chains have said they aren't interested in going into the financial services industry, it seems like a pretty logical move and I would expect more will follow.

Tags: Banking, KR, Kroger, Wal-Mart, WMT