Sainsbury’s to pull out of its banking services as it focuses on groceries

SAINSBURY’S is pulling out of banking services to concentrate on groceries.

The supermarket giant says it is looking for other businesses to take on its credit cards, loans and savings accounts.

And some of Britain’s biggest banks, including HSBC, Barclays and Lloyds, may be tempted.

But Sainsbury’s insists there is no cause for alarm among its 1.9million finance customers, saying they will not notice any change — at least for the time being.

Boss Simon Roberts said: “We have been clear since we launched our Food First strategy in 2020 that we would concentrate our efforts on our core retail businesses and today’s announcement reflects that.”

The withdrawal has been on the cards for years.

Rival Tesco is also rumoured to be looking to sell its banking business.

But it is still a major climbdown for Sainsbury’s after 27 years of trying to flog financial services to its customers.

The supermarket first set up a banking business in 1997 in a joint operation with the Bank of Scotland.

It paid £248million to buy out the bank’s half-share of the business in 2014.

But as its focus returns to food shopping, the bank may be seen as something of a distraction, especially as it has never really become the major player that Sainsbury’s may have hoped.

AJ Bell investment director Russ Mould pointed out: “Over the past two decades, supermarkets saw an opportunity to make more money off their customers than by simply selling food and drink.

“During this time we’ve seen various ventures in mobile phones, broadband, energy, garden centres, coffee shops, restaurants, bakeries and more alongside the provision of core financial services.

“But a lot of these ventures have since been sold on to third parties.”

There’s no time frame for the banking switch.

Sainsbury’s-branded products could be outsourced to other financial providers, as it already does with insurance.

TV SALES FALL BUT PROFIT UP

ELECTRICAL goods store Currys cashed in on sales of appliances and extras as cash-strapped customers did not replace older TVs and PCs.

Currys said profits will likely double to around £110million in the last year as it encourages customers to buy extras, such as software and leads for PCs or stands and brackets for TVs.

However, it revealed a 3 per cent fall in sales over the crucial 10 week period to January 6, which covered both Christmas and Black Friday.

It blamed the slowdown in sales of bigger ticket items.

Boss Alex Baldock said consumers are still “hard-pressed” as the cost-of-living crisis continues, with confidence improving but “bumpy”.

That was reflected in a record demand for credit as more people look for ways that “help them afford expensive products”, Mr Baldock said.

He said headphones were the number one Christmas gift while mobile phones sold well.

WATCHES’ BAD TIME

SHARES in Watches of Switzerland slumped by more than a third today after the retailer slashed its outlook for the year and said it expects “no recovery in consumer demand”.

The company said revenue would be up to £170million less than predicted and that revenue growth would be a quarter of that previously expected.

Chief executive Brian Duffy said: “The festive period was particularly volatile this year for the luxury sector.”

FLUTTER NFL HELL

BETTING giant Flutter has lost a packet on American football in recent weeks after a number of punter-pleasing NFL results.

The Paddy Power and Betfair owner said gridiron cost it a staggering £270million as unlikely teams such as the Buffalo Bills, powered to this weekend’s divisional play-offs.

But as usual the bookie bounced back and its US revenue grew by 38 per cent over the year.

Boss Peter Jackson said: “While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.”

In the UK and Ireland, revenue for the year climbed 15 per cent to £2.46billion.

The company plans a stock market listing in the US at the end of January to help boost its American presence.

It owns FanDuel, a popular US betting website and online casino.

Mr Jackson added: “This is a pivotal moment for the group as we make Flutter more accessible to US-based investors.”

BRIGHTER FUTURE ON CARDS

ROYAL MAIL said it had its best festive performance for four years as it recovered from a long-running pay dispute.

Stamp price hikes led to an 11.8 per cent rise in letter revenues in the last quarter of the year, despite six per cent fewer letters being sent.

Owner International Distributions Services posted a £169million loss in the first half of the year, but is now expected to break even.

Parcel revenues jumped 14.4 per cent as a fifth more were delivered than in 2022, when strikes disrupted the service.

Boss Martin Seidenberg hit out at the business’s obligation to deliver mail six days a week.

He said: “It is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.”

Royal Mail has asked Ofcom to axe Saturday deliveries.

The watchdog is expected to publish its recommendations later this month.

STRUGGLING online wine retailer Naked Wines is slashing jobs, including on its board, to cut costs as sales continue to tumble.

About 50 jobs will be axed after sales fell by a tenth.

However, shares rose 7 per cent after the news of the job cuts.

PERKINS’ JOB AXE COST CUT

BUILDERS’ merchant Travis Perkins axed jobs at the end of 2023 and warned of more action as it tries to make cost cuts of £35million in the face of a construction slowdown.

The firm has around 20,000 staff across the UK and in its Toolstation business in Europe and about 1,400 branches.

Recent job cuts were at its Northampton head office but it has warned local branches are set to be hit too.

Travis Perkins axed 400 jobs and had already shut 19 branches at the end of 2022.

The home improvement retailer said the latest cuts mark the “first steps” in a new cost cutting turnaround plan.

The firm said it hopes earnings for the year will be around £180million, much lower than the £236million expected.