Supermarket branches are an increasingly popular way for banks to reach new customers and provide greater convenience to existing ones.

But clearly the strategy is not for every bank. In 1988 and 1989, Cole Taylor Financial Group Inc., Wheeling, Ill., opened branches in three warehouse food stores in and around Chicago. By 1992, the bank had closed them all.

Michael Wien, group senior vice president, said the bank found that customers did not shop at the warehouse stores on a weekly basis. Instead, they made less frequent trips to buy larger quantities of goods.

And, he added, When we were hidden in the Cub Foods environment it was a greater challenge for us to become an integral part of that community.

Larry Kurek, senior financial analyst, said the bank was not attracting new customers and that most people were using the branches for cashing checks, making deposits, and other routine transactions. We were not able to get any (loan) volume out of those places.

Cole Taylor used a system, called Summit, from Interactive Planning Systems, to evaluate the profitability of the branches.

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