Banking comes to supermarkets

By KEVIN TAYLOR and SIMON HENDERY

Grocery shoppers will be able to make cash deposits and withdrawals at the checkout from next year under a deal struck between the country's largest supermarket operator and an Australian bank.

Foodstuffs, which runs the New World, Pak'N Save, Write Price, and Four Square chains, has signed a deal with Australia's fifth-largest bank, St George, which will see banking services introduced at its stores.

Foodstuffs' managing director Tony Carter said the company had been working towards offering banking services to its customers for about three years.

New Zealand banks had declined to get involved because they believed the venture would take away existing customers.

St George managing director and chief executive Gail Kelly said the venture - which will involve a 50:50 sharing of costs and profits between her bank and Foodstuffs - was a "low risk and efficient means of entry to the New Zealand market".

Supermarket banking services - to be marketed under a name which the companies are keeping under wraps - are scheduled to begin in the first three months of next year.

By the end of the year the companies anticipate offering a range of transactions and savings accounts, mortgages, credit cards and insurance products through supermarkets.

St George general manager of personal customers Luke Bunbury said checkout operators would handle withdrawals and deposits, and service desks more complex transactions.

The range of banking products would be offered progressively, but at first customers would only be able to use internet and telephone banking with Foodstuffs' stores offering information on the products.

St George banking counters would not appear in supermarkets.

Customers would instead use the checkouts and service desks, which would not occur until mid- to late-2003.

Asked whether St George banking products would be available in every one of Foodstuffs' 478 outlets, Bunbury said the sites would be assessed on a case-by-case basis.

Mr Carter said the new bank's strength would be its accessibility to the 3.2 million shoppers who walked through Foodstuffs' doors each week.

Senior lecturer in banking studies at Massey University David Tripe said supermarkets already offered cash withdrawal facilities from bank accounts through eftpos.

He did not think the supermarkets would handle many over-the-counter transactions, as internet and telephone banking channels were more important.

Finance Sector Union acting general-secretary Andrew Casidy said that although he had heard no detail of St George bank's plans, he thought supermarkets were not set up for banking given the "enormous security risks" that would create.

In the past five to 10 years security has been beefed up at banks, because of the large number of armed robberies.

"I can't envisage for the life of me how a supermarket can be set up to provide those security measures," Casidy said.

Such measures in banks included close-circuit TV, time-lock safes, and separating cash handlers from the public.

"A supermarket checkout operation just does not seem to be appropriate in any way, shape or form."

Casidy said supermarket staff would also have to get special training to handle banking transactions.