The Co-operative Group is throwing caution to the recessionary wind by launching into the package holiday market in the hope that its trusted brand values and low-cost offers will lure cash-strapped customers who have been spooked by the collapse of travel companies and airlines such as Zoom and XL.
The supermarket chain has today begun offering holidays for summer 2010 in a joint venture with Cosmos Holidays, the UK’s largest independent tour operator, and sister airline, Monarch.
Co-op is offering more than 220 holidays in 22 destinations focused on favourites in Spain and Florida. Its high-street travel shops are already among the UK’s top three holiday retailers, and it hopes that 15 percent of the £1.3bn worth of holidays it sells annually will be its own in the first year.
Mike Greenacre, managing director of The Co-operative Travel, believes the Co-op’s member-owned business model and ethical stance would attract customers.
“It may seem an inopportune moment to be launching a tour operation,” he admitted. “It is, however, a measure of the confidence that we have in our revitalised brand and in the strengths of Cosmos ... and Monarch ... that we choose to launch into such a difficult marketplace.”
Package holiday companies have cut about 15 per cent of capacity this summer, according to ABTA, the industry association, and bookings to May were about 11 per cent lower than the year before. Its members turn over £23bn annually.
Mr Greenacre said: “Brand has become the decisive factor for customers in 2009 as they look for the trust and integrity that is absent from so much of ‘big business’.”
The Co-op’s 3m members will also be eligible for a double dividend, earning a pay-out from the annual profits, so would receive £20 back from a £1,000 holiday.
Peter Brown, chief executive of Cosmos and the Monarch Travel Group, said: “The partnership is a perfect fit for both our businesses and we believe that between us we can establish a brand which offers exceptional value for money and which recognises the growing demand for sustainable tourism.”
The Co-operative has adopted a single brand across its activities, from pharmacies to funeral care. It also bought supermarket chain Somerfield and merged with the Britannia Building Society.