Plain packaging is impairing small stores’ ability to compete with larger chains and supermarkets, new data from Australia has revealed.
Nine months after plain packaging was first introduced in Australia, just under 80% of retailers said they were suffering longer transaction times and increased frustration from shoppers, Philip Morris-commissioned research by Roy Morgan found.
According to the study of 450 retailers, 65% had also seen an increase in the frequency of staff giving the wrong products to customers, while 75% of retailers said it was also taking longer to order new stock.
Just over 60% said their staff now had a heavier workload, and 28% had been forced to increase staff hours.
Some 65% of retailers, meanwhile, reported that their feelings towards the government were now “less favourable” as a result of the plain packaging legislation, and 83% said it had “negatively affected” their ability to compete.
“It was clear that plain packaging was going to have serious financial ramifications for convenience store owners and the latest research confirms this,” said Australasian Association of Convenience Stores (AACS) chief executive Jeff Rogut.
“Costs associated with increased transaction times, customer frustration, inventory management delays, as well as heavier staff workloads and training requirements have all been necessarily absorbed by convenience stores at their own expense, placing undue pressure on their bottom line.
“The only reasonable conclusions to be drawn from this latest independent research is that firstly, while plain packaging has clearly had a negative impact on margins for small retailers, tobacco remains an important product for convenience stores, and secondly, that despite all the fanfare and political pats on the back, tobacco sales remain largely unaffected and smokers continue to consume this legal product,” Rogut added.
The Scottish government has pledged to “take account of any new evidence emerging from Australia” as it gears up for the launch of its own plain packaging consultation in a matter of months.
Public health minister Michael Matheson pledged to “push ahead” with the plans and hopes to introduce legislation in 2014-15.