News

TESCO is poised for an assault on the holiday market following its purchase of travel retailer First Call Leisure.

The acquisition - for an undisclosed sum - is believed to be part of the supermarket giant’s long-stated plan to move outside its traditional grocery business. It has already muscled in on one major travel industry earner with the sale of off-the-shelf holiday insurance.

Crawley-based First Call Leisure has been allied to Tesco as the agency responsible for providing travel deals for its loyalty Club Card scheme via a quarterly magazine. Shoppers can currently exchange reward points for short breaks, flights and days out.

“It made sense for us to bring First Call Leisure into the fold,” said a Tesco spokesman. “We want to go into new markets and travel has potential. Although we won’t be selling holidays straightaway we certainly wouldn’t rule it out in the future.”

ABTA confirmed the easiest way for Tesco to develop holiday sales would be to buy a bonded agent such as First Call Leisure because the association sets tough entry requirements for new members.

Most likely is a move to sell holidays via the Tesco.com website, with First Call Leisure handling ticketing arrangements.

Worldchoice commercial director Keith Wilson said agents should pay close attention to the supermarket’s acquisition.

“Tesco seems committed to breaking into other markets and that’s a concern,” he said. “Obviously, selling flights and accommodation-only is not difficult and is ideally suited to the Internet, but this is the thin end of the wedge.

“We believe people know there is no substitute for the face-to-face contact with a travel agent for complex bookings, but we’ll be keeping a very close eye on Tesco.”

Ironically, it was founded by Air Miles pioneer Keith Mills who has recently been rumoured to be starting up another loyalty scheme for Sainsbury’s. Tesco has just taken the Air Miles business from its supermarket rival and will begin offering its deals from March 15.