Geography matters for banks in stores

When it comes to establishing banks in grocery stores, geography is everything, said executives from the banking and grocery industries.

Seeking one-stop shopping for customers, grocery stores are still trying to lure banks and other

But locations of surrounding banks might have a lot to do with whether banks will open supermarket branches.

In the late 1990s, the banking industry and grocery stores began teaming up to offer banking inside supermarkets.

Allfirst Bank, based in Baltimore, had opened several branches in grocery stores, but then it was acquired by Buffalo-based M&T Bank. M&T subsequently closed three of those Central Pennsylvania branches, M&T spokesman Chet Bridger said.

In-store banks can work in some locations but not everywhere, Bridger said.

He pointed out that the Weis supermarket at Roosevelt Avenue and Route 30 in West Manchester Township, York County is the only store in the region with an M&T branch. The store's high volume and location makes it work in the county, he said.

"There is a customer base that enjoys the availability of bank services at that store," he said.

M&T is not looking to grow its supermarket locations, he said. The company does have an intense strategy for locating ATM machines in convenience stores. M&T has ATMs in 340 Sheetz locations and dozens more in Rutter's Farm Stores, and that has proven to be a success, Bridger said.

Andrew Samuel, chairman and chief executive officer of Graystone Bank, based in Harrisburg, said since his bank is less than two years old it does not have any plans to locate in any supermarkets. Graystone has locations in Harrisburg, Lancaster and Leola.

"I think there is a time and place for that, but we don't have that on the radar right now," he said.

Supermarket bank locations tend to be satellite offices instead of primary vehicles for reaching customers, Samuel said.

Tracy Pawelski, spokeswoman for Cumberland County's Giant Food Stores, said Giant has been successful with getting banks to open branches in some of its stores. There are currently 55 banks operating out of 215 stores in five states, she said. Giant works with several banks, including Citizen's Bank, Keystone Nazareth Bank & Trust, PNC Bank, Sovereign Bank and Member's 1st Federal Credit Union.

Still, despite the success in some stores, geography does play a big part in whether Giant can team up with a bank, she said.

"Banks love being in Giant," she said. "It's great exposure to customers, and it's an appealing investment as far as lower capital goes.

Depending on a bank's marketing strategy, she said, the number of neighboring banks can prevent a bank from going into a new store - such as in the revived Delco Plaza in West Manchester Township, York County. The new Giant has a full-service pharmacy and sells gas, but it has no bank.

There are several banks nearby, including a CommunityBanks branch and Citizen's Bank branch in the same shopping center, as well as a M&T branch.

Connecting shoppers and with services like banking and pharmacies is still a trend in the industry, according to Elizabeth Peroni, spokeswoman for Pennsylvania Food Merchants Association Communications.

"Our members are always trying to offer new shoppers' services, " she said, adding that success really depends on the local market and bank strategies.