'Banks preferred to supermarkets'
Updated on 04 November 2009
Supermarkets face a battle to win financial customers, with only one in 20 people saying they would opt for the retail giants over a traditional bank, research has shown.
Just 4% of people said they would trust a supermarket to look after their money more than they would trust a bank, compared with 27% of people who said they would trust a bank more.
A further one in five people said they would not trust a supermarket with their finances at all, according to website moneysupermarket.com.
Supermarkets have made no secret of the fact that they want to expand further into financial services, with many already offering a range of products, such as credit cards, savings accounts, insurance and loans.
Tesco recently announced plans to create a full service retail bank and it re-named its financial services division Tesco Bank.
In his Government-backed review of the savings and investment industry Ron Sandler said people trusted supermarkets more than they trusted many traditional financial services providers.
But 41% of people questioned for the research said they thought supermarket brands were expanding too much and should stick to traditional products, although more than a third of people said they were happy with the growth.
Kevin Mountford, head of banking at moneysupermarket.com, said: "Many people are naturally cynical about the expansion of large brands into new product areas, feeling that certain companies are getting a bit too big for their boots in taking on so many different industries all at once.
"However, in general the introduction of more competition within financial services should be seen as a positive move, especially after a period of consolidation.
"More competition generally heralds a better deal for consumers, and with that in mind we welcome any new entrants to the market."
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