It was of course the week the travel industry was reeling from the shock announcement that Thomas Cook and The Co-operative Travel were to enter into a retail joint venture.
Reactions in the trade ranged from delight from rival consortia, to sadness from Co-op agents who feared the loss of their company’s ethical values, to anger from other tour ops who pledged to complain to the Office of Fair Trading. Most notable were the claims by then chief executive Manny Fontenla-Novoa about what the JV would mean for store closures. He predicted that of Thomas Cook’s 800 and Co-operative’s 400 branches, only 100 would close over the five-year term of the deal.
The reality has been far more drastic: almost a third of Thomas Cook stores have since been closed, while The Co-operative Travel stores have been halved: a total of 440 closures in all. The combined number of employees is almost half too, from 8,900 in 2010 to 4,600 by last year, according to the JV’s last accounts.
That sales have been almost maintained over those five years, across a much smaller retail estate, suggests the JV has been successful to a point, but it’s not been enough to tempt The Co-operative Group to turn down the £80 million payout it has now chosen to take.
When The Co-operative Group walks away from the JV next year, it will sadly mean 208 fewer stores on the high street that carry the much-loved Co-operative name.
Could The Co-operative Travel have survived – and could more jobs have been retained – if it had not entered into the JV? We’ll never know. But the fact that other Co-operatives – albeit much smaller – are reporting real growth in their travel divisions suggests it’s a possibility.
The Midcounties Co-operative has hinted this week that it could look to take on some of those Co-op-branded stores itself if Cook was keen to talk. Perhaps as part of an independent business once again, they’d have a greater chance of survival than the JV has been able to offer them.
