• In the UK, Wal-Mart’s Asda Group is testing the use of service butcher departments in five stores, hoping that the program will build on the company’s new strategy of creating value-added initiatives that are not linked solely to low prices.
Asda already operates service butchers in 13 Northern Ireland stores, which have combined for a 13 percent increase in meat sales this year alone.
If the new pilot works, the serviced butcher concept is expected to be expanded to as many as 70 stores by the end of 2007.
• The Wall Street Journal reports this morning that while debate still surrounds Wal-Mart’s desire to get into the financial services business via the operation of an industrial bank, the retailer already “has built a sizable presence in the financial-services business” by “selling financial products to low-income customers who may shop in its stores, but don't have relationships with traditional banks -- those that the industry defines as the ‘underbanked.’ Among the offerings: check cashing, bill payment, money orders and a partnership with MoneyGram International Inc., of Minneapolis, that enables immigrants to send money to their home countries from a Wal-Mart store.”
According to the Journal, Wal-Mart is becoming more vocal about its strategy in the part of the financial-services sector that competes with banks, check cashers, postal services and money-transfer companies like Western Union, a unit of First Data Corp., of Greenwood Village, Colo. Wal-Mart is trying to enter the check-cashing business in Massachusetts, could get help in doing the same from proposed legislation in Rhode Island, and has explored offering college-savings plans.” In a recent speech, Jane Thompson, president of the retailer’s financial services operations, raised a few eyebrows in the traditional banking community when she said: "We have only scratched the surface of what's possible.”
Asda already operates service butchers in 13 Northern Ireland stores, which have combined for a 13 percent increase in meat sales this year alone.
If the new pilot works, the serviced butcher concept is expected to be expanded to as many as 70 stores by the end of 2007.
• The Wall Street Journal reports this morning that while debate still surrounds Wal-Mart’s desire to get into the financial services business via the operation of an industrial bank, the retailer already “has built a sizable presence in the financial-services business” by “selling financial products to low-income customers who may shop in its stores, but don't have relationships with traditional banks -- those that the industry defines as the ‘underbanked.’ Among the offerings: check cashing, bill payment, money orders and a partnership with MoneyGram International Inc., of Minneapolis, that enables immigrants to send money to their home countries from a Wal-Mart store.”
According to the Journal, Wal-Mart is becoming more vocal about its strategy in the part of the financial-services sector that competes with banks, check cashers, postal services and money-transfer companies like Western Union, a unit of First Data Corp., of Greenwood Village, Colo. Wal-Mart is trying to enter the check-cashing business in Massachusetts, could get help in doing the same from proposed legislation in Rhode Island, and has explored offering college-savings plans.” In a recent speech, Jane Thompson, president of the retailer’s financial services operations, raised a few eyebrows in the traditional banking community when she said: "We have only scratched the surface of what's possible.”
- KC's View:
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While we certainly share some of the concerns about the power that Wal-Mart would wield in the financial services community, everything the company has done in its history suggests that all it will do to the banking business is lower prices and force traditional banks to be more competitive. These banks don’t want to hear it, but they are no more entitled to protectionist legislation or regulation than the discount stores, supermarkets and mom and pop shops that compete with Wal-Mart (many of them with far shallower pockets) everyday.
We’ve said it before, and we’ll say it again. Compete is a verb.
Even if you’re a banker.
