Yahoo Finance Woolworths warned it's not a bank: report
Woolworths has reportedly been reminded that it’s not a bank and has been warned against using the word ‘‘banking’’ in its marketing material.
Fairfax reports the Australian Prudential Regulatory Authority (APRA) is investigating the supermarket giant after it labelled its credit card business as a banking service on its website despite not having a banking licence.
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It is illegal for companies to use the words "bank", "banker" or "banking" to describe their businesses unless they hold a banking licence from the Australian Prudential Regulation Authority (APRA).
Fairfax reports that a Woolworths spokesperson has reportedly admitted that the supermarket made a mistake.
The rise and rise of our supermarkets
Over the last couple of years, Australian supermarkets – particularly arch rivals Coles and Woolworths – have gone on an overdrive to diversify their businesses beyond retail, to cover a range of products and services.
From personal loans to pokie machines, car insurance to cuppa soup, they are out-competing each other to be present across a variety of consumer touch-points.
Coles has revealed it was considering becoming a member of the Financial Services Council, giving it a seat at the table among the nation’s leading wealth managers.
The supermarket teaming up with GE Capital in a plan to issue personal loans in a joint venture that will see the supermarket issue credit cards and other personal finance products, like small loans, from mid next year.
Throw in their recent venture into insurance and their daily financial products suite is also starting to look like that of a big four bank.
Related: Coles enters the banking game
Analysis by Commonwealth Bank a few years ago showed almost 40 cents in every retail dollar in Australia is spent at Woolworths or Coles (Wesfarmers).
“Both groups have been expanding their market share through a spate of acquisitions, which has given them an enormous concentration in our retail market,” said CBA’s retail analyst Andrew McLennan at the time.
And since then, those acquisitions have continued to grow. Woolworths’ brands now include Thomas Dux grocer, Big W, Masters Home Improvement, Dan Murphy’s, BWS, Cellarmasters, Langton’s, ALH Group and Ezibuy.
ALH Group has a portfolio of over 460 liquor outlets across Australia and 294 licensed venues, including Young and Jacksons in Melbourne and the Kirribilli Hotel and Crows Nest Hotel in Sydney.
These venues are home to an estimated 12,000 pokie machines.
Coles has got flybuys, Liquorland, First Choice Liquor, Vintage Cellars, Bunnings, Officeworks, Target and Kmart under its umbrella.
