Not long after Giant Food and in-store banking partner Chevy Chase Bank announced that they would be parting ways, PNC Financial Services Group Inc. began working with Giant to open branches in their stores.
PNC announced an agreement Thursday to open 41 in-store branches and 180 ATMs in Giant stores in the Greater Washington area by the end of 2009.
“It’s a great market for us,” said Laila Krause, executive vice president of PNC. The Pittsburgh-based company purchased Riggs National Corp. three years ago and Baltimore’s Mercantile Bankshares Corp. last year, allowing it to expand into Maryland, the District and Virginia.
“Ever since PNC moved here … they’ve been very aggressive about positioning themselves in this region,” said Stephen Fuller, director of George Mason University’s Center for Regional Analysis and authority on the local economy.
PNC has grown swiftly in recent years. In Maryland alone, PNC’s market share increased from .31 percent in June 2007 to 9.64 percent at the same time in 2008, according to an FDIC report.
Bert Ely, a banking consultant and longtime observer of Washington-area banking, said that PNC has increased its business since entering the market.
The goal of PNC in the region, according to Mr. Fuller, is to be visible and establish itself as the go-to bank. He said the strategy of partnering with Giant “fits exactly into that strategy.” In recent years, grocery stores have become one-stop shops, offering pharmacies and photo developing as well as banks.
Greg Teneyck, director of pubic affairs for Safeway’s eastern division, said that in-store banking is just another service that stores can provide for their customers. Safeway has had a relationship with Suntrust Banks Inc. for eight years and has either an ATM or a branch in all Safeway stores in the eastern division, which covers Northern Virginia, the District and Maryland.
“The one-stop shopping experience is certainly appreciated by customers who are starved for time,” he said.
These kinds of services make grocery stores popular, but the banks benefit as well.
Ms. Krause was confident that PNC’s relationship with Giant would yield more business as the convenience of locations will both encourage new customers and continue to provide services to existing customers.
Mr. Ely said that Chevy Chase probably judged that their in-store branches were not producing as much return as desired.
According to Mr. Fuller, “There’s a cost to putting these mini-banks in Giant … and they have to look at payback.”
Giant, which has had in-store banking since 1998, immediately began looking for another bank to partner with. “We feel that it’s a service our customers appreciate,” said Jamie Miller, public affairs manager for Giant. “We were committed to finding a new banking partner.”
PNC has partnered with grocery stores in other regions, but the contract with Giant marks the first in the Greater Washington area.
Ms. Krause said branches and ATMs should begin opening in Giant stores in January 2009, with at least 41 branches and 180 ATMs open by the end of the year. More branches may open over the course of the 10-year commitment, and Ms. Krause said that PNC plans to add locations and expand with Giant.
The in-store branches will offer everything from check cashing and online banking to loans and investment services, she said. PNC has had success with in-store branches in other markets and customer feedback has been positive.
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