| Canadian Tire Corp. is my favorite store for power | | | | have started offering high-interest savings accounts, |
| tools. I use my Canadian Tire bucks to pick the latest | | | | conventional mortgages and guaranteed investment |
| toys in the power tools category. But will consumers | | | | certificates in the two Ontario markets of |
| who are used to buying bicycles from Canadian Tire | | | | Kitchener-Waterloo and London and Calgary. |
| trust them with their mortgage | | | | The migration of retailers into financial services as |
| Canadian Tire is Canada's biggest retailer of auto | | | | competition has increased in the grocery, house wares |
| parts and household goods. Canadian Tire announced | | | | and mass merchandising retail sectors. |
| that it will now allow customers in three test markets | | | | Wal-Mart Canada Corp. hired the former |
| to combine their mortgage, chequing and savings | | | | vice-president of financial services for American |
| accounts, as well as loans and credit card balances, | | | | Express Canada last year to assess its options for |
| into one account. Canadian Tire's "One and Only" | | | | expanding into financial services sector. Industry |
| account has no setup or transaction fees and | | | | sources predicted Wal-Mart, which has not applied for |
| customers who use it will earn bonus Canadian Tire | | | | a banking licence, will likely branch into the segment |
| money, the company said. "Giddy up" the tool master | | | | through a third-party financial institution. Canadian Tire |
| said. | | | | used the same method of getting banking expertise by |
| "Consumers are looking for value, they want to bank | | | | poaching a senior American Express executive to kick |
| with someone they trust and they are looking for | | | | start their entry into banking. |
| alternatives to traditional banks," said Pam Dodaro, | | | | Another grocery retailer Loblaw Cos. has long held an |
| associate vice-president of retail banking products at | | | | official Canadian banking licence. It uses but uses its |
| Canadian Tire Financial Services. She has a point. The | | | | bank solely for running its credit card business. The |
| success of the Capital One ads and the credit union | | | | grocery giant's PC Financial division offers banking |
| ads that poke fun of the banks is an indication of the | | | | products including no-fee accounts, lines of credit and |
| underlying dissatisfaction that consumers have with the | | | | mortgages, in partnership with the Canadian Imperial |
| banks. The trick is whether Canadian Tire will be able | | | | Bank of Commerce. My experience with uses of PC |
| to satisfy consumers demands for financial services | | | | is that they find it cumbersome and without the |
| as well as they can for consumer goods such as | | | | benefits of being able to talk to customer service i.e. |
| power tools and bicycles. | | | | Face to face. |
| Canadian Tire has been successful in attracting people | | | | Canadians are extremely conservative in their use of |
| to its Master Card. I know because I have one. They | | | | banks in Canada. They want to be able to reach out |
| entered the market by extending the credit criteria to | | | | and touch someone, especially when their money is on |
| areas the conventional banks did not want to touch | | | | the line. The relationship of the consumer to the bank |
| thus growing their consumer base. The attractiveness | | | | has eroded over the last twenty years. Bankers |
| of the Canadian Tire money associated with the card | | | | whose advice was sought have devolved to shills for |
| makes it easy for it's customers to redeem their | | | | mutual funds and LOC's. If the new comers can |
| Canadian Tire money. Simply whip out the Master | | | | provide the security in touch and consumer service |
| Card and see how much you have on your | | | | they will definitely give the banks a run for their money |
| account...easy peasy. | | | | and ours. |
| Canadian Tire acquired a banking licence in 2003. They | | | | |