Is the provision of financial services by grocery retailers an effective means of enhancing customer loyalty?

The increasing level of competition faced by grocery retailers is leading them to differentiate their range of goods and services in order to acquire customer loyalty. One way is product augmentation. The provision of financial services in-store is an example of this strategy. The existing literature has mainly analysed the retailers’ provision of financial services in terms of its implications for the bank-retailer relationship in terms of competition/co-operation between the two players (Worthington and Harbisher 1997; Alexander and Pollard 2000; Martinelli and Sparks 2003), ignoring the implications for the retailer-customer relationship, as highlighted by Martinelli (2002).Within this context, the paper presents the results of empirical research intended to determine whether the provision of financial services by grocery retailers can enhance customer loyalty. In order to fulfil this goal, a survey was conducted on a sample of retailers' customers. The methodology employed a structured questionnaire which aimed to investigate the major behavioural and cognitive indicators of customer loyalty. The interviews were conducted in France. This economic context was chosen because of French retailers' high level of evolution in the provision of financial services to their customers. However, despite this market's individual features, the results can be extended to other contexts. esults prove the presence of behavioural customer loyalty, but a weak correlation with cognitive customer loyalty. The findings are discussed together with managerial implications.