Canadian Tire Money
Tuesday, 17 July 2007 19:00
Written by Staff
Of course it didn’t hurt that Loblaw chairman Galen Weston sat on the CIBC board, and that CIBC already handled the supermarket company’s corporate banking. A Loblaw vice-president, Robert Almeida, touted his stores’ value as bank locations, armed with survey results that said people wanted to bank and shop in the same place. Under their deal, CIBC provides the financial products and infrastructure and splits the revenue with Loblaw.
Ten years later, the pavilions are still in Superstore, with over two million customers in-store and online; and now, Canadian Tire is in on the retail banking game.
The chain entered the finance game years ago with the old Canadian Tire credit card. In 2002, it started switching accounts from that to its new Options Master Card and looked to expand credit services. But not operating as a chartered bank, it faced red tape in the regulations of each province and territory. The charter it received in 2003 means only one set of rules to meet under the federal Bank Act.
Canadian Tire officials announcing the charter said they only wanted more credit card business, expecting to eventually save $6 to $8 million a year. “The charter allows us to introduce products and services, but that is not something we have planned at this point,” said one. But now, at the Canadian Tire Financial website, you can find out about insurance and lines of credit, too.
Putting bank kiosks in retail stores is not a new idea, nor is it a sure winner. The TD outlets once found in Wal-Mart followed the U.S. trend of banks keeping their own colours in a store setting. The President’s Choice deal bucked that trend by keeping the CIBC logo out of the pavilions. Doing so, it followed the lead of similar ventures in the U.K., where Sainsbury’s and the Virgin Group offer credit and savings plans.
Other retailers have also entered banking as a new line: Sears Bank of Canada was chartered in 2003, and in 2005 a Vancouver auto dealer, Don Wheaton, became the country’s first private owner of a chartered bank.�