M&T Bank is expanding its niche in supermarket cobranding.

Last week, the regional bank in Buffalo and Giant Food Inc., Landover, Md., said they have entered a cobranding card arrangement.

The Giant Food Visa card would be the fourth supermarket cobrand issued by M&T Bank since 1995. The others deals are with Top Markets, Price Chopper, and Seaway Food Town.

"We found that people who shop at grocery stores have tremendous loyalty," said Alan Ellison, vice president and credit card business manager for M&T Bank. "It provides us with brand awareness we wouldn't have if we marketed the card under our own name."

Shoppers will receive a 3% rebate on Giant purchases and 1% on purchases made elsewhere. The cap on rebates is $500 annually. Rebates, in the form of certificates redeemable at Giant Food, will be sent out on a quarterly basis.

There is no annual fee for the card. An introductory rate of 9.9% goes up after five months, to 17.15% for Gold cards and 18.15% for standard cards. For customers with insufficient credit or a problematic credit history, M&T will offer a secured card on the same terms, with a minimum deposit of $250 held as collateral.

Barry Scher, a spokesman for Giant, said the supermarket was interested in cultivating relationships with its customer.

"Loyalty. We want people to continue shopping at Giant again and again," Mr. Scher said. "We're excited about it, a lot of customers have already signed up."

He said that during the last two years the supermarket has seen an increase in credit card use.

"Two years ago, no one used credit cards," he said. "Today, it comprises 20% of our business. There is a growing trend for credit card usage at checkout counters."

James Accomando, president of Accomando Consulting, Fairfield, Conn., said, "The whole trend in the supermarket business is to get into cobranding.

"Like all industries with (thin) margins, they haven't jumped into the program with two feet. Supermarkets are in a unique situation. Food is a necessity, it's not like Nordstrom's. Everyone has to eat."

Giant operates 161 stores in the Mid-Atlantic states, and has a customer volume of 20,000 per store per week, Mr. Scher said.

M&T Bank is a subsidiary of First Empire State Corp., which has $12 billion in assets. M&T Bank's card outstandings are $250 million, on an account base of 230,000.

David Robertson, president of The Nilson Report, based in Oxnard, Calif., said the bank's cobranding initiatives helped it to increase its portfolio by 52% last year, bumping it from 86th place to 76th in the newsletter's ranking of the biggest card issuers.

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