CHESTERFIELD, Mo.-First Community Credit Union is reporting it has seen higher transaction volume at branches it has inside Walmarts vs. stand-alone branches.
The $1.6-billion CU has 35 branches in Missouri and Illinois, 11 of which are located inside Walmart stores. A 12th Walmart location is coming soon, in Granite City, Ill., according to SVP-Retail Sharon Hudson, who said the branches inside the world's largest retailer have exceeded expectations.
"We do everything at our Walmart branches, from regular transactions to taking loan applications to closing loans," she said. "The Walmart stores have been very successful for us. It is much less expensive than building a brick-and-mortar branch, and there are 1,000 people per day going through Walmart stores. If we had our choice in expanding to a new area, we would want to start in a Walmart."
In most cases, Hudson explained, a First Community branch in a Walmart begins with a five-year lease. The CU pays the expense of building out the branch in the space provided. Once opened, the day-to-day expenses of its Walmart branches are "low compared to other branches," she said.
First Community's Walmart branches have six employees each, including a manager, an assistant and a supervisor, and are open every day. The manager works five days, while everyone else works four days. Weekends are split amongst the staff.
The largest FCCU Walmart location is more than 2,000 square feet, but most are smaller, averaging approximately 700 square feet. The branches typically have three teller windows, a financial services desk and an office for member privacy in an otherwise open environment.
One hook to get shoppers into the CU's branches is food. Popcorn is served all day, every day at all locations, in bags carrying the slogan, "Thanks for Poppin' In." In addition, popsicles are handed out on hot summer days.
"We can put up any marketing we want inside our area," said Hudson. "Usually there is a theme based on the month or the season. Besides the popcorn, all branches have their own marketing materials. We don't push people to join, but we make sure we are recognized."
Some of the Walmart buildings have First Community CU's signage on the outside, depending on how much room is available and on local building codes. Each Walmart location has a full-service ATM Hudson described as "very busy."
"We don't close mortgage loans at our Walmart branches, but we take applications. Transaction volumes of the Walmart branches are roughly equivalent to the regular branches. Lending volume is comparable to branches of similar sizes, depending on the area. We don't find they are any less. Some branches are much busier, but they are a lot larger."
Better Than Grocery Store Branches
Why build CU branches at Walmarts as opposed to in grocery stores? Hudson said the latter tend to be less of a "destination" than a Walmart. "With grocery stores people have one favorite store. But people do their grocery shopping and they buy other things at Walmart. We would not be interested in a grocery store branch."
In 2010, First Community's 11 Walmart branches handled nearly one-million financial transactions. Overall transaction volume was up 4%, but the Walmart offices had a 20% increase in transaction volume.
Hudson said expenses at the Walmart branches are "very comparable." One aspect that helped: utility bills at Walmart branches are cheaper, she noted.
The Walmart program was initiated by Glenn Barks, president and CEO of First Community. The first Walmart branch opened in 2004 in Maplewood, a suburb of St. Louis, with less than 500 square feet of office space and a few thousand transactions.
In 2010 First Community CU posted nearly $9.7-million in net income excluding NCUA assessments. It paid $1.7 million to the NCUSIF and $1.8 million to the corporate stabilization fund, leaving it with net income of $6 million. Its net worth ratio was 8.44%.