Over half of convenience stores could be missing out on more profitable tobacco sales, new research by the Scandinavian Tobacco Group UK Limited (STG UK) suggests.
While adult smokers were now more reliant on retailers to communicate tobacco advice and guidance than ever before, 51% were not doing so when needed, research from 1,000 daily smokers revealed.
The findings demonstrated “a huge missed opportunity,” STG said.
Jens Christiansen, head of marketing and public affairs at STG UK, said: “Since the arrival of the display ban and standardised packaging, shoppers are increasingly looking to retailers for advice on what to buy, especially if their favourite brand is out of stock.
“By taking time to really understand the category and different products on offer, retailers will be able to recommend a suitable alternative, and even a different segment within tobacco, to avoid missing out on sales and giving them the opportunity to capitalise on the high profit margins that cigars offer.”
The survey also highlighted that price, in terms of out-of-pocket spend, has the greatest influence on consumer tobacco purchasing decisions, coming out top of the poll (61%), with perceived value for money a close second (47%).
Unlike cigarettes, cigars, which were exempt from much of the regulations contained in the European Tobacco Products Directive (EUTPD) can still be sold in packs of 10, meaning that in many instances, cigars can offer a cheaper alternative, STG said.
Stocking cigars would allow retailers to directly respond to both of these findings, with brands like Café Crème offering “reassurance of quality, as well as smaller pack sizes and even individually wrapped cigars offering low out of pocket spend,” STG added.
The figures also revealed that of those smokers who hadn’t tried cigars before, 24% would be encouraged to buy them because of taste and 19% would buy them if they thought they were cheaper, further reinforcing the consumer demand for value within the tobacco category.
“It seems like there is still some work to be done to ensure that retailers are offering the right support to deliver strong sales,” Christiansen added.
In light of the findings, STG has launched a new Lock, Stock and Sell campaign, aimed at educating retailers on the current trends in the market. Over the coming weeks retailers will be offered an array of advice and support to help them make the most of their sales opportunities.