ALL WAL-MART SUPERCENTERS TO HAVE IN-STORE BANKS

CHRIS O'LEARY

PHILADELPHIA -- Wal-Mart Stores, Bentonville, Ark., plans to equip all existing and future supercenters with in-store banks.

The retailer will install bank branches in more than 100 supercenters scheduled to open in 1996. About half of Wal-Mart's 200 existing supercenters have banks, and the retailer plans to retrofit its remaining stores.

Wal-Mart officials, speaking at the Supermarket Banking Conference held here late last month by Global Business Research, New York, also touted the benefits for banking firms of opening branches in supercenters vs. supermarkets.

"The growth of supercenters will become one of our mainstays in the future," said Randy Lillard, leasing manager for Wal-Mart. "We'll be opening 100 to 110 new supercenters next year, all of which will have banks."

"Banking is a service that our customers have told us they want," added Tony Fuller, director of property management.

Banks in supermarkets are becoming commonplace and some markets may become saturated in the next few years, Fuller said. By contrast, supercenters offer virgin territory for banks because the retail format's size often mandates being located in non-commercial areas.

"Our customers are coming to areas where there may be no bank to serve them," Fuller said. Supercenters offer "an environment that will allow [banks] access to more new customers than before."

Supercenters also have a wider demographic base than the average supermarket, he said, which enables a bank branch to reach a much broader population.

"We have more than 40,000 to 50,000 customer transactions each week in our supercenters," Fuller said. "Customers come in an average of two to two-and-a-half times per week." The retailer has found its supercenters draw customers from more than a 30-mile radius, he added.

Wal-Mart views bank branches as a way to boost customer loyalty. The retailer is actively courting local banks with a strong community presence as a way to gain acceptance in a new marketplace.

"Our primary focus has been banks that are already a part of

their community -- someone that customers know and can identify with," Lillard said. "We want to make sure we give community banks every opportunity to get into our stores."

Though Wal-Mart is courting bank partners, it is determined that its branch partners pull their own weight. The retailer analyzes potential partners to ensure they are in solid fiscal shape and that they have full backing from top management.

"We are very conscious that banks we deal with have the ability to turn a profit and make money," he said. "It's very important for us that we team up with banking partners with proven growth and good earnings."

The retailer is also demanding in its contracts with banks that the branch will guarantee continued service even if the original owner is bought out in a takeover or merger.

"We need to secure long-term potential if a banking partner is bought out," Lillard said, adding that while the retailer is aware of the tumultuous state of the banking industry, it does not want its customer service to be affected.

Bank branches also must be receptive to requirements Wal-Mart customers may demand from them, including a wide variety of services and extended hours. "Banks must be willing to change to meet [our] customers' needs," he added.

A Pennsylvania-based bank with branches in both supermarkets and a Wal-Mart supercenter said its supercenter branch has had a "higher draw of customers." The branch has also performed strongly beyond the basic functions of checking and savings accounts.

"The supercenter branch we opened six months ago has already exceeded its one-year projections for consumer loans," said Gary Reinert, vice president of retail facilities development for Meridian Bank, Wyomissing, Pa.

There are disadvantages to a supercenter branch, however, he added. Banks tend to get overlooked in the large amount of store space and are competing for consumer attention against other services like restaurants and hair salons.

"There's also questionable shopper frequency," Reinert said. "We're not yet in a position to evaluate the number of customers who come back [to supercenters] on a regular basis."