Australia's St George to set up retail bank with Foodstuffs

Foodstuffs said it would apply for registered bank status and offer an "innovative range of products" from early next year. Foodstuffs through its Pak'N Save, New World and Write Price stores, has 55 percent of the national supermarket market.

Bank branches would be located in the Pak'N Save, New World and Write Price and Four Square stores.

All costs and benefits would be shared equally between St George and Foodstuffs.

"Teaming up with New Zealand's premier supermarket retailer offers St George a low cost, low risk entry into a new market very similar to those we operate in now, and is a logical step in our organic growth strategy," St George managing director Gail Kelly said.

"The alliance has been carefully designed to leverage what we see as complementary banking and retailing skills.

"We bring our core retail banking and product development capabilities, and will access (St George's) resources where appropriate to drive cost efficiencies with the alliance.

"Foodstuffs brings its highly developed distribution skills, as well as an unequalled access to customers flowing from its more than 55 percent share of New Zealand's supermarket sales."

It said the alliance was expected to commence business in early 2003, and initially would introduce new products over the Internet and telephone, with support from Foodstuffs' network of stores.

"Over time, the intention is to develop a broader instore banking capability including utilisation of eftpos and ATM networks," St George said.

"A loyalty programme is also being explored as part of the alliance's overall customer proposition."

St George said Foodstuffs had more than 3.2 million customer visits per week.

"There are 478 Pak'N Save, New World, Write Price and Four Square stores offering the potential for the alliance to offer banking products at points of presence well in excess of the number of branches operated by any of New Zealand's major banks," it said.

"A similar approach has proved successful in the United Kingdom where around five million customers have opened savings, transaction and credit card accounts through the Tescos and Sainsburys supermarket chains."

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