Discount supermarket diversifies into travel

An interesting example of how a retail brand can extend its brand into a different consumer market…

Discount supermarket group Aldi has just launched its UK travel operation.

Aldi said the model it was using was similar to how the supermarket sells food. It will offer a limited range of holiday deals but hopes to sell them in big volumes. Aldi Travel is already a successful venture in mainland Europe, where it caters for over 500,000 holidaymakers every year.

Aldi is entering an incredibly competitive market. The main package holiday market is dominated by two super-groups - Thomas Cook (combining TC + Airtours/Mytravel) and TUI (combining Thomson Holidays and First Choice). However, Aldi has one incredibly powerful competitive advantage - a brand that is clearly linked to offering customers a discounted product. It sounds like it might be bad news for some of the remaining low-margin UK travel agents or smaller package tour operators