The financial sector in the UK is very very broad - perhaps one of the broadest in Europe - with very few barriers to entry for the large corporations who can show a high degree of financial strength. One group of companies who have really opened up to the loans, insurance and general financial sector are the supermarket - with influential giant Tesco again leading the way.
Why are the supermarkets so influential?
The main reason why the supermarket giants are so influential is their size, and the fact that they touch almost every member of the population of the UK, on a regular basis. It comes down to that old fashioned human trait, ease of access - or laziness as some may describe it!
The more items and services which are available in one shopping trip, the more chance of more and more people taking advantage. While shoppers were initially wary of buying financial products from their local supermarket, this scepticism soon disappeared on the back of massive advertising campaigns by the majors. It seems that every store you visit now a days offers extremely attractive loans or saving rates.
While the headlines and advertising will refer to Tesco for example, the majority of these services are administered by a banking partner, who will administer the service on behalf of the supermarket group.
What Are The Advantages And Disadvantages?
While the pros and cons of this type of service may differ from person to person, there are a few common aspects to consider.
The advantages are fairly simple:
The disadvantages are:
There is no doubt that the supermarkets have given the more traditional banks something to think about, due in the main to their every day access to potential new customers. Customers who are often very trustworthy of a particular supermarket brand, while maybe a little less trusting of the traditional banking community.