The logical attraction for the in-store branch is that you get lots of branches with less people needing to run them. Plus, you get to reach people where it's really convenient for them. The first reality is that while there are less people per square foot working in the branches, they tend to be working longer hours because of the extended times the supermarket branches need to be open. That can eat up labor savings. At the same time, while the square footage is less the stores, the rent tends to be higher per square foot and that cuts into the potential profitability as well.
Banks also see non-traditional branches as ways to improve customer service.
There are only a couple of flies in this logical ointment. The first is that bank products are generally not the kind of impulse purchases that go well in a supermarket environment. The second is that traffic counts do not correlate to increased bank revenues. In some ways you'd think banks would know this already. After all, we're pretty much done with the rash of mall branches that have some of the same characteristics as our supermarket branches.