Customers are confused about exactly what the supermarket banks are offering, with many expecting to walk in to a store and find an in-house branch, according to a new study.
Market research consultancy Left Field says it has found that people are unsure what value the retailers are adding.
“Consumers know that the services are backed by banks and cannot see what extra they are getting from the involvement of Tesco or Sainsbury’s,” says Left Field part-ner Bob Edwards, former manag-ing director of Edwards Martin Thornton.
“They expect the supermarkets to cut prices – like they have with petrol. But they don’t understand how this can be done,” he adds.
“If they have a current account they are unlikely to be paying charges in any case.”
The research, which used focus groups, highlights that customers ascribe the same values to the retailers’ banks as they do to the stores.
However, Tesco’s bank has the edge on Sainsbury’s because it is backed by the Royal Bank of Scotland, which has the best image among banks.
Similar research from advertising agency Foote Cone & Belding shows that while consumers think that Tesco has gone into financial services as an extension of its service, they are sceptical about Sainsbury’s motives.
FCB marketing director Mark Hartstone says: “Consumers think that Sainsbury’s is just copying Tesco.”