business news in context, analysis with attitude

The Wall Street Journal reports on an interview that Wal-Mart CEO Lee Scott did with Fox News in which he said that reports of the retailer’s decision not to pursue an industrial bank charter were perhaps a little premature. "We'll take another look at it," Scott said, adding, “"We're looking at how we can make a bite out of that apple.”

Wal-Mart withdrew its application for a charter earlier this month, after the Federal Deposit Insurance Corporation (FDIC) put a hold on the retailer’s application, and a general moratorium on the consideration of all such applications from non-financial services companies. Wal-Mart’s application has been opposed by the banking industry, which has claimed that the retailer had intentions of getting into precisely the businesses mentioned in the renegotiated leases; Wal-Mart, on the other hand, has maintained that it only wanted to own a bank so it could use it to reduce fees on credit and debit card transactions.

However, just before Wal-Mart pulled its application, it was reported Wal-Mart had been renegotiating the terms of its leases with a number of banks that have branches in its stores, reserving for itself the right to offer a broad range of financial services, including loans, lines of credit and mortgages. Indeed, the leases say explicitly that Wal-Mart can offer these products and services “in the checkout lanes, at the customer service desk, through automated-delivery channels, kiosks" – virtually anyplace in the store.
KC's View:
At the risk of being repetitive, we’ll simply say that there is a difference between a surrender and a tactical retreat.