Think tank: The tobacco opportunity

Are you ready for the opportunities in tobacco?

There’s a lot of talk regarding the upcoming changes in supermarkets with regards to the display of tobacco - or rather the lack of it. It’s crucial convenience retailers do all they can to keep up-to-date on legislation developments (particularly differences between England, Wales, Scotland and Northern Ireland) as the impact goes beyond just tobacco and the supermarkets themselves.

We know from speaking to supermarket shoppers that because they will not be able to see the products or their prices, a small proportion of smokers will purchase more of their cigarettes needs from c-stores, off-licences, newsagents and forecourts. The total sales uplift for these other channels has been estimated to be anywhere between £0.5bn to £1bn. This figure is not purely on tobacco sales, but is due to additional category purchases that could be made when smokers visit their c-store more.

We know the categories most commonly purchased with cigarettes in c-stores are newspapers, confectionery, milk, soft drinks and alcohol. Do you stock the key lines? What is your availability like for each of these five categories?

Although it’s likely the display ban will be effective in England as of April 6, convenience retailers looking to take advantage of cigarettes sales switching to their stores will need to be ready as early as February as supermarkets will begin rolling out the new tobacco gantries in the next month or two in order to be ready for the deadline.

Considerations regarding the display of tobacco are:

Keep up-to-date on legislation and key dates

Review your tobacco range. Does it reflect current trends (ie. growth in value brands or Roll Your Own)?

Is your range and availability of confectionery, milk, soft drinks and alcohol credible? These products are commonly purchased with cigarettes in c-stores.