The impending tobacco display ban represents the “greatest opportunity since the National Lottery” for retailers, according to Booker chief executive Charles Wilson.
He believes that the three-year gap between when larger stores have to cover their gantries and when smaller stores have to follow suit will mean an additional £1bn per year in revenue for the sector.Under the terms of the ban, stores over 3,000sq ft in size will have to cover up their gantry by April 6, 2012, dubbed ‘D-Day’ by Booker, while stores smaller than this will be able to display their tobacco products until the ban comes into effect in April 2015.
Booker estimates that £500m-worth of tobacco sales could move into the independent sector in 2012 with footfall in the channel increasing by two million additional customers per week.On top of this, Wilson believes that the migration of tobacco sales in the independent sector will drive an additional £500m worth of grocery sales.
“This is a billion pound opportunity for the independent retail sector,” said Wilson. “When the multiples go dark, independent retailers will be able to provide consumers with all of the elements they want in a tobacco purchase - availability, price, range and NPD.”
Wilson predicted that this will present the greatest opportunity for the independent sector since the introduction of the National Lottery 17 years ago. “We believe April 2012 will be the beginning of the best trading period for the independent sector since 1994,” he said.
Imperial Tobacco head of distributive and vending Patrick Toms said that retailers needed to be aware of the potential opportunity that the display ban presents. “If they are not careful, independent retailers are going to sleepwalk into the display ban without realising the opportunity that will offer,” he said.
Booker hopes to help independent retailers capitalise on the opportunity by providing briefings to its customers on the display ban and creating a greater focus on its Red Band own-label range, which it believes will thrive in the three-year gap.