The plan by Sainsbury’s to throw in the towel on banking is symbolic of the struggle that retailers have had in applying their skills to finance.
Big shopping concerns decided in the 1990s that what banking needed was consumer know-how. It looked as if the oligopoly of high street banking would be challenged.
Newcomer to the scene HBOS, a combination of Halifax and Bank of Scotland, recruited Andy Hornby from Asda, believing he could give it the edge as it competed with NatWest, Barclays, HSBC and Lloyds.
The experiment went horribly wrong. HBOS came within seconds of collapse in 2008 and had to merge with Lloyds.
Unbelievably, for a few days Lloyds let it be known that Hornby would be an asset before the HBOS shambles was exposed.
Big shopping concerns decided in the 1990s that what banking needed was consumer know-how. It looked as if the oligopoly of high street banking would be challenged
There has been no such disaster at the grocery banks. But as regulations were tightened, post the great financial crisis, the regulatory demands for ever more capital quickly became a burden.
It was not the best way for stores groups to allocate funds at a time when they have faced food challenges from German upstarts Aldi and Lidl and a new generation of online clothing retailers.
Marks & Spencer handed the keys to HSBC, the Co-operative is throwing in its lot with Coventry Building Society and Tesco Bank wants out.
Metro, the only new challenger to adopt a consumer-friendly approach, has been beset by reporting and capital problems.
At a closed door session in Davos this week, led by Barclays and international finance group Manulife, the big global players discussed how they should respond to the competitive challenge from fintech and private lenders.
Jamie Dimon of JP Morgan saw it coming some time ago and has invested in no fewer than 80 fintech enterprises across the globe and launched digital bank Chase.
Fintech banks also have struggled with regulation. Research disclosed in Davos shows customer growth rates up more than 50 per cent in all sectors and across regions. The industry is having particular success with under-served consumers and businesses.
Products were found to be more affordable than among traditional banks. The likes of UK start-ups Revolut, Wise and Monzo may have had their problems. But as the grocery banks fade away they are the next wave.
Switching on
Currys ought to be racing away. After all, it is the last electronics store in most of Britain’s retail parks.
The big struggles have been overseas in the Nordics, which went badly wrong, and in mobile, after the misjudged Carphone merger.
Both are finally correcting and, in spite of a dull UK Christmas for new TV screens, chief executive Alex Baldock unveiled a profits upgrade of £105million to £115million for the current year.
Barring more accidents there should be even better times ahead.
Mobile phones are doing well, including the pricey Apple iPhone 15 and the Samsung flip screen model. Difficulties in Scandinavia are in retreat with full margins restored on subdued sales.
New games and consoles are roaring away and should continue to do so, and there is hope that with the Olympics and football’s Euro 2024 this summer the TV doldrums will dissipate.
Currys, like other retailers, despairs at a business rates system which favours Amazon big box warehouses over stores but is managing to maintain its edge.
With debt vanishing, helped by the Greek disposal, there is greater focus on investment in integration of systems allowing a closer grip on overseas operations. As for customer service… that’s a different story.
VAT victim
There can be no better illustration of why the Chancellor needs to end the VAT on overseas visitors to the UK than the performance of Watches of Switzerland.
Lower-priced watches are around five grand and prices range up to £30,000, making it nuts to shop here.
Often for British retailers the US is the problem and the home market saves the day. At the luxury watches group the reverse is the case.
A profits warning because of vanishing British sales produced a calamitous 37 per cent collapse in the shares.
Home-grown shoppers are better off heading to Paris, staying in a five-star hotel, feasting in a top restaurant, and returning with the goodies and some small change.
