With the Competition Commission unable to conclude its inquiry into the grocery supermarket industry, we’ve been kept waiting for Tesco’s next ‘Big Idea’, the masterstroke we’ve all come to expect that will see Tesco disappear away from the ensuing pack, as it did with its move into convenience with T&S in 2003.

Buying out its joint venture with Royal Bank of Scotland, this week, Tesco announced a plan to bring high-street banking in-store for the first time. And it means business because it’s put Tesco CFO Andrew Higginson in charge. It’s paid a lot of money, too: £950m is 12.5 times earnings, well above the seven times multiple valuations we’re currently seeing. So, is its move into banking ‘The One’?

Even though it’s not a bargain, if Tesco can make it work, based on the multiples we’ve seen in the past, it would be a great investment. And it’s certainly an easier way, in the current economic and legislative environment, for Tesco to boost its UK profits by multiples of billions, than adding a bunch of Tesco Extras or bolting on another 500 c-stores, or putting hard discounter ‘shops’ within its stores. It also makes last year’s foray to buy Dobbies, another Scotland-based venture, look like an eccentric environmental sideshow.

I think it could also be good news for three other camps. With banks making such a mess of their affairs, it was typical of this government that it chose to censure the supermarkets again for doing a good job. If Tesco can shake up banking, first it will do the government a favour it doesn’t even realise it needs. Second, consumers will benefit. And it’s surely better for rival grocers if Tesco is kicking lumps out of the banks. Next up for Tesco: oil and gas, please.

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