SENIOR travel professionals have dismissed supermarket moves to muscle in on the travel industry following John Lewis Partnership’s launch of Greenbee.com.
JLP – owner of supermarket Waitrose – has launched Greenbee.com, a white-label version of Expedia incorporated with Cox and Kings’ content.
It is the latest supermarket firm to enter the travel industry following Tesco’s white-label deal with Lastminute.com, Asda and Sainsbury’s in-store pods supplied by first Choice and Harvey World Travel concessions in Morrisons.
However, industry leaders doubt the impact JLP and others will have on the sector. Cheapflights.co.uk chief executive David Soskin said it takes more than £100 million to create a reputable travel brand in the UK. “Why would you buy travel from supermarkets instead of Thomas Cook,” he asked.
Lowcostgroup chief executive and Travel Weekly columnist Paul Evans said consumers would not purchase travel from non-travel specialists unless they receive added incentive to do so.
“The new white-label online versions have little or no product or price differentiation,” he said.
“I don’t believe consumers are so loyal they will buy all their services from one supplier.”
Never knowingly undersold
By Miles Morgan, former sales and marketing director, TUI UK
So, the supermarkets try their hands at travel. Nothing new there – supermarket implants have been around for years – so what’s different? Well, for a start, the endorsement of the store.
John Lewis and Waitrose are great brands – even though they are not fully used under the odd Greenbee name – with a loyal client base and good web traffic.
They are still just playing at it, thinking that with a client base of eight million in store they will drive some incremental spend, which will add some bounce to the bottom line. If they were serious we would see a presence in shops. This would then hit their whole customer base and really raise awareness of travel.
Supermarkets are experts at getting a return on every square inch of their floor space, but travel margins don’t stack up compared to the 50% plus margins enjoyed on core products. Margins for everyone are getting tighter and while partnerships with the likes of Expedia are quick, easy, cheap and risk free, is there enough margin for everyone? I don’t think so.
John Lewis is not used to selling intangible products. Look and feel the clothes. Quality is a key part of its success but how will it manage an airline, a transfer company and a hotel?
Never underestimate the power of these guys but, brand risk over quality and low margins suggest this venture is short-lived.