Thousands of jobs in the retail industry will be jeopardy if plain packaging of tobacco products were to be introduced, a new report claims.
Triggered by an estimated loss of up to £20m in profits from tobacco sales, the job cuts in small stores would be starkest in in urban and suburban areas of the UK, the report carried out by the Centre for Economics and Business Research, and commissioned by Philip Morris International, claims.
“We find that lower prices for legal tobacco, increased illicit trade and a shift by customers from convenience retailers to larger retailers as a result of increased transaction times and longer queues are expected to have the most significant absolute impacts on small independent retailers in urban and suburban areas of the South East of England, London and the North West regions,” the report states.
Job losses in small stores in the South East of England, London and the North West of England could number 4,466, 3,683 and 3,305 respectively, due to the lost tobacco and non-tobacco sales that can be expected to result from plain packaging the report added.
“With so many local communities dependent on small independent retailers, such effects would have negative implications in terms of their wider social impact. Plain packaging would also increase the likelihood of business failures at a time and in circumstances in which retail space occupancy rates on the High Street are already noticeably depressed,” the report concluded.
Scott Preston of Tagon Stores said the move was also likely to prompt tobacco range rationalisation, with slower selling lines and brand extensions delisted in favour of brand leaders.
In July the government postponed plans to introduce plain packaging in England until the impact in Australia could be measured, however, the Scottish government recently reaffirmed its commitment to introducing it.
Worth £15.8bn, tobacco remains the UK’s largest FMCG category by sales value, and is a key sales and footfall driver for small stores.