I went to my local Kroger grocery store the other day and was surprised to see ads for all kinds of financial services. Kroger was promoting Home Mortgages, Home Equity Loans and Lines of Credit, Pet Insurance, Credit Cards, Gift Cards, and Identity Theft Protection. They were pushing the brochures out front where you get the shopping carts and at every checkout aisle. I guess it makes sense for them to do this since they have so much traffic coming through the stores everyday.
Here are some details from the programs:
- Home Mortgages - The company providing the loans, KPF Mortgage, is actually 49% owned by The Kroger Company. This one surprised me the most since having a mortgage company is far outside of their core business. They offer to waive the application fee but I have no idea how competitive the rates are compared to the large mortgage companies.
- Home Equity Loans and Lines of Credit - For these products, Kroger has partnered with Charter One Financial. The brochure states they have loans as low as 1% below the prime rate.
- Pet Insurance - This program is offered by PetFirst Healthcare. They claim to be able to save you 90% on your vet bills and you get $10 off for applying online. Personally I have heard horror stories about families not getting reimbursed by pet insurance companies if their pet has a serious injury or illness.
- Identity Theft Protection - This program is offered by PrivacyGuard, which is a service of Trilegent. The first month is only $1 and $11.99 every month thereafter. This seems like it could be a successful program for Kroger since it is low risk and low cost.
It will be interesting to see how long this initiative lasts for the Kroger Company and if other grocery stores follow suit. It seems congress though is not keen on people like Wal-Mart getting approval to set up their own banks. The grocery stores are certainly changing the face of the gas station industry(http://www.thatmoney.com/read-136-Free_Gas_Programs_from_Grocery_Stores.htm) so they maybe able to replicate the success in financial services as well.
Kroger has 2,468 Grocery Stores in 31 states
Headquarters: Cincinnati, Ohio
CEO: David B. Dillon
Employees: 310,000
2006 sales: $66.1 billion
