Retail giant Musgrave to explore financial services opportunities
MUSGRAVE confirmed yesterday that it may begin selling financial services for the first time, in plans given a guarded welcome by consumer groups.
The retail giant behind SuperValu, Superquinn and Centra said it was in the "early stages of looking at providing services such as insurance products to our customers".
The retailer added that it was "exploring the financial services space after receiving customer feedback that this is one of a number of services they would like to see offered by our retail brands". The plans "are in their infancy", according to company spokeswoman Sue Lamon-Diver.
Ms Lamon-Diver denied that the company was planning to launch a bank. News of the retailer's push into financial services was first revealed in the 'Sunday Independent'.
Supermarkets in many countries are expanding into financial services, as retailers use data gathered from loyalty cards to amass vast amounts of information about their customers' buying habits.
Tesco has recently begun offering current accounts and mortgages in Britain after selling insurance, credit cards and loans and savings products for more than a decade.
Dermott Jewell, chief executive of the Consumer Association of Ireland, said Musgrave's plans could be good for consumers if they increase choice – but warned that supermarkets can also stifle competition.
"When you are looking at a relatively large organisation that engages with consumers on a regular basis, there is a positivity there," he told the Irish Independent yesterday.
"A lot depends on the offer. They may not necessarily be competitive. What this market needs is a competitive player."
Musgrave has been examining plans to use almost 680 SuperValu, Superquinn and Centra stores around the country as a ready-made distribution network for products ranging from debit cards to loans, insurance and credit cards.
The retailer is recruiting a number of key executives to "help shape the plans", the 'Sunday Independent' reported.
Musgrave is considering launching the services in late summer 2014. The company has not yet decided whether it will be a joint venture with another financial services group or another bank in order to provide further products.
It is thought that Musgrave will be able to tailor financial products to its customers through extensive use of its 'Real Rewards' loyalty card scheme, which contains valuable insights into customer spending patterns and habits.
Equally important is that customers will be able to clock up reward points by using the retailer's banking products.
Retailing legend Feargal Quinn also tried to enter the Irish banking sector at the end of the 1990s when setting up Tusa, a joint venture between his Superquinn supermarket chain and Permanent TSB.
However, after two years, the innovative banking group had attracted just 10,000 customers and had written less than 500 mortgages. The Tusa business was shuttered in 2001.