Tesco Bank plc - every little helps

Posted in 'Personal Finance' by Richard Catlin

03 April 2009

Tesco is now looking for your banking business.

Britain’s largest retailer has announced plans to open in-store bank branches in 30 of its stores by the end of 2009 following a successful trial in Scotland.

Tesco already offers credit cards, personal loan and insurance products. It is believed to have paid Royal Bank of Scotland around £1 billion for its 50% share in Tesco Personal Finance at the end of last year.

It has also invested heavily in its own Tesco Compare brand and says that it plans to offer current accounts to shoppers within two years.

Despite its overall dominance in the retail sector, figures released at the end of March show that recently Tesco has lost some market share to rivals Asda and Morrisons, as the supermarket price war continues and as consumers switch shopping habits during the recession.

Grocery price inflation stood at 9.3% for the first 12 weeks of 2009. Research has shown that price is by far the most important factor for consumers in deciding where to do their grocery shopping – as reflected by the growth of independent price checking site MySupermarket.

In a press release, Tesco has described its target market as those looking for a “more traditional bank”, and promises to be a “responsible lender”.

Our latest Banking and Credit Card Survey has revealed a huge shift in consumer satisfaction with the level of customer service they receive - with a significant drop in overall customer service levels for the first time in 5 years.

Bucking the trend shown in our 2009 survey is the continued dominance of First Direct at the top of the customer service league table – with over 90% of customers continuing to rate the service they receive as ‘excellent’ or ‘very good’.

We’ll be publishing full results from the 2009 survey shortly.