Desert Schools Eyes 10 Grocery Branches

PHOENIX, Ariz. – Desert Schools Federal Credit Union, long an advocate of supermarket branches to draw new business, is setting its sights on opening 10 of the facilities by yearend in metropolitan Phoenix. “We’re simply very enthusiastic about how these facilities can recruit new members whom you might not reach quite as easily with a traditional branch,” explained Lee Brice, vice president of branch operations. Desert Schools already has four of the units, each staffed by two full time employees and part-timers, operating in four grocery outlets, including two owned by large chains. It is set to open a fifth facility in July in a Fry’s supermarket in Chandler, one of the city’s fastest growing suburbs. “We have contracts but no open date for two more branches in Apache Junction and Mesa, ” said Brice. While a number of banks in some areas of the U.S. have closed their supermarket facilities as unprofitable, Desert Schools contends that is not the case in Phoenix “ where there’s plenty of competition.” Whereas a traditional branch can serve both existing and new members, the supermarket branch, said Brice, has the potential of introducing a CU to individuals who might not have considered opening a CU account. The key, however, is to recruit outgoing “enthusiastic, upbeat” staffers who are not shy about approaching individuals “as they buy bananas.” The Desert Schools operation also employs humor and a few marketing ploys including having employees dress up in costume for “wacky weekends.” . “We had employees put white stuff on their nose and dress up as lifeguards as they pushed home equity and swimming pool loans,” said Brice. In developing its program, Desert Schools said it has been working with a Cornelia, Ga.-based consulting firm, Financial Supermarkets Inc., to help train employees in dealing with the public in the supermarket environment. FSI, a subsidiary of Community Bank and Trust of Cornelia, has been guiding both banks and CUs on selling techniques, said FSI founder and Chairman Alton J. Wingate who estimates there are100 CUs now operating grocery facilities. That number, he forecasts, is expected to climb within the next year or so to 500 as interest increases, he said. “As more credit unions retain a community charter, they find they can branch out economically reaching and identifying a new customer base,” said Wingate. One Iowa credit union, John Deere Community Credit Union in Waterloo, which has been in the supermarket branch field for 10 years, contends its four outlets experience high activity and are profitable. At least two of its Hyfee supermarket branches have yearly profits exceeding $1.2 million and, one of its branches in a large mall has 19 employees. “We feel very positive about the growth of these branches,” said Mike Harvey, executive vice president. “They are open seven days a week, on Sundays and holidays and the members love it complimenting us all the time.” -