Supermarket Chain Builds Personal Finance Business

[Oct 8, 2007.]

 

The name "Kroger" has become synonymous with deli, freezer, and bakery items. But the supermarket giant is also making a name for itself in the personal finance business.

Three years ago, the company developed its own credit card. Now, Kroger has expanded its offerings to include market mortgages, home equity lines of credit, home insurance, and life insurance.

Interestingly enough, Kroger officials do not expect to make a great deal of money in the personal finance sector. Rather, they are simply trying to increase the amount of foot traffic in their stores and transform occasional shoppers into loyal customers.

Kroger's bottom line has been impressive—the company racked up revenues totally more than $66 billion in 2006. It's unclear how much the company is making in fees associated with its personal finance services.

The services are popular among consumers who look to Kroger as a one-stop shop. It can simply be convenient to bank at the grocery store, rather than making an extra stop on the way home from grocery shopping.

Wal-Mart is following suit, introducing a prepaid VISA debit card along with other personal finance services. The retailing giant also plans to greatly expand the number of money centers in its stores.

While financial outlets inside supermarkets are popular overseas, they represent a relatively new trend in the States. Although American supermarkets have housed bank branches for quite some time, the idea of grocery stores actually offering financial services themselves is a recent phenomenon.

It's expected that the services may become as popular as pharmacies and gas pumps at the nation's supermarkets. While consumers may not be lobbying for this trend, chances are they will take advantage of it once it's offered. And supermarket officials apparently like the idea of advertising their stores as full-service entities, able to meet a customer's many needs.

Julie Ann Amos
October 8th 2007

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