The surge in sales of value-priced tobacco brands is being accelerated by the display ban, with no shortage of new products in this arena.

Just over two months have passed since the UK tobacco market went dark. However, Convenience Store’s first tobacco feature since the display ban’s introduction is pleased to find that sales through convenience stores appear to be holding their own, with most retailers reporting no change to their tobacco volumes.

In fact, Imperial Tobacco head of independent retail Andrew Miller describes retailers’ response to the ban as “remarkable”. “Retailers have met the challenge head on with minimal disruption,” he adds. Miller’s words are undoubtedly true of those retailers who received tobacco industry support in making their gantries compliant, however, even those who have had to source and implement their own solutions are now reporting no real issues when it comes to serving adult tobacco customers, bar a few glitches with price lists.

“We had a bit of a panic when our independent supplier arrived to fit the doors only two days before the display ban was implemented, but now that they are up we are not having any problems with serving adult customers,” store manager Anita Nye of Eldred Drive Stores (Premier) in Orpington, Kent, says. “Shoppers had become used to seeing the doors in supermarkets so most of them haven’t even asked us about the change, they just accepted it straight away,” she adds. “It’s a relief as tobacco remains a key category for us.”

New products

Player’s Crushball

Imperial Tobacco introduced Player’s Crushball nationwide on 1 June.

Available in King Size 18s with an rrp of £5.99, Player’s Crushball is a smooth variant that complements the brand’s quality Virginian tobacco with a capsule in the filter tip that, when activated, releases a burst of fresh flavour.

Imperial Tobacco’s brand portfolio chassis manager Madeleine Pearce says: “Crushball has taken the cigarette market by storm, and now boasts a share of about 8%. Smokers enjoy being able to instantly transform their smoking experience, so we’re delighted to welcome Player’s Crushball to our fold.

“As the cheapest Crushball on the market, Player’s is set to continue its recent excellent progress in the growing sub-economy price sector.”

Player’s Crushball King Size 18s is available in both standard and pricemarked packs (while stocks last).

David Worlsford. owner of Farrants newsagents in Cobham, Surrey, is also reporting smooth sailing. David has had an Expotutto Servertab unit fitted to the ceiling of his temporary CTN and stationery store in Cobham while his main store across the road is being redeveloped. The large bespoke unit, which is soon to be fitted with digital media screens, can house almost all of the main store’s vast range of cigarettes, RYO brands and specialist lines. “Sales have remained steady since the display ban was introduced - even with all of the building work we are having done,” David says. “The Servertab unit is proving really successful. The staff find it very efficient and quick to use, and they don’t have to turn their backs on customers in order to locate brands. It’s also far easier than a unit with doors when it comes to monitoring availability as staff just need to look up to see what’s there and what isn’t. The other significant benefit is that the unit has left my back wall free to fill with higher-margin goods such as printer cartridges. Customers haven’t been fazed by the ban at all. As specialist tobacconists my staff were already highly attuned to our range and used to engaging with shoppers and had the industry knowledge to talk to them about their brands and options.”


Judging by the recent wave of new product development (NPD) news to wash across our desks in recent weeks, the dark market environment does not appear to have left innovation high and dry either.

JTI alone has executed a number of pieces of successful NPD since March, including the launch of B&H Blue King Size 18s and, just this month, limited-edition packs of its premium cigarette brand Camel were rolled out across King Size 20s.

The same can be said for Imperial, as Miller explains: “Despite the challenging circumstances of a post-display ban world, our range continues to thrive and this is illustrated through a raft of new product launches - including new Player’s and Carlton offerings and L&B Blue Superkings 10s.”

Unsurprisingly, most of the aforementioned launches (with the exception of JTI’s Camel) involve brands from the value end of the pricing scale.

Imperial’s L&B Blue Superkings 10s, for example, have an rrp of £3.78 and are designed to “appeal to value-seeking consumers in the economy price sector who desire the reassurance of a big name brand as well as the low out-of-pocket spend and convenience that the Superkings 10s format offers.”

Value for money

Value cigarettes now account for more than half of all cigarette sales in the UK, according to JTI, and the segment is growing as more smokers downtrade in a bid to offset rising prices.

Year-on-year tax increases have seen the price of cigarettes increase well above the rate of inflation. This year’s Budget saw a further 16p heaped on to the price of a packet of 20 cigarettes. And when you consider the fact that most uk adult smokers come from “lower income” backgrounds (evidenced by recent Office of National Statistics data) it’s clear to see why demand for low-price cigarettes is so high.

C-store sellers

Top 10




Lambert & Butler



Windsor Blue


Sovereign Blue


Source: Nielsen Market Track Q1 2015

This demand also appears to have been heightened by the tobacco display ban, with many adult smokers now simply asking for “the cheapest brand”, as Manny Patel of Manny’s in Long Ditton, Surrey, explains.

“Smokers can’t browse the range anymore so they just ask us whatever is cheapest. It means that we have to be really on the ball with what we stock and the price that we sell it for. People rarely ask to see the printed price list, which is a good thing as it would probably lead to delays at the till point if everyone stopped to read it,” 
he adds.

And as we head further into 2015 and beyond, the swing towards value products looks set to become even more pronounced, as Nielsen’s tobacco analyst AJ Shergill explains: “Now that the market is dark, growth will predominantly come from either well-known brands or brands that offer a lot of value for money. Brands towards the bottom of the price ladder will continue to grow, mostly at the expense of middle priced brands.

“Premium brands will continue to have their core base of consumers who, even with price increases, will continue to purchase them. However, premium will still decline, just not in line with the decline of middle priced brands,” he says.

The challenge of offering existing adult smokers budget friendly prices is about to get a whole lot harder, too. By this time next year the EU Tobacco Products Directive (EUTPD) will have been implemented - dropping the axe on the production of all cigarettes in packs of less than 20. From May 2016 UK tobacco manufacturers will also no longer be able to produce roll-your-own tobacco in packs of less than 30g, although retailers are expected to have a few months in which to sell through old stock before it becomes illegal for them to sell it.

The new law will pose a sizeable challenge to retailers, many of whom will have to reconfigure their gantries and storage solutions to cater for selling larger pack sizes only. It will also have an impact on cash flow as store owners have no choice but to shell out for costlier larger packs.

Existing adult smokers, meanwhile, will have no choice but to pay higher prices for larger packs.

The change is particularly concerning when you look at how the tobacco market is currently divided up in terms of pack sizes. Just a couple of years ago 20s were by far the biggest-selling pack size format in the market; now they account for just 30% of sales. In fact, sales volumes of packs of 20 have fallen by almost 36% in the past year as the tobacco manufacturers have moved to smaller pack sizes - namely 19s - in a bid to keep retail prices low.

According to new Nielsen data, packs of 19 - which will be banned from next year - now account for the lion’s share of sales, with 43% of the market. Cigarettes in packs of 10, whose days are also numbered, make up 21% of current sales.

Exactly what this change will mean for sales is as yet unclear. Will smokers simply switch to buying larger packs less frequently? Anita of Eldred Drive Stores thinks so: “People won’t stop buying cigarettes just because smaller cheaper packs are no longer available. They will just buy packs of 20 every few days rather than 10s every day, for example. I am slightly concerned that this could have an impact on footfall, but hopefully shoppers will still keep coming in for other regular items such as their daily newspapers and confectionery and soft drinks.”

The imminent axing of small packs has not deterred the UK’s tobacco manufacturers from launching new ones for now - Imperial’s recent launch of L&B Blue Superkings 10s is just one example.

Menthol and capsules

The looming threat of legislation has also failed to hamper NPD or sales of menthol products (also set to be banned by 2020 as part of the same EUTPD rules.)

Menthol cigarettes make up just over 8% of the current market and sales are rising year on year, according to JTI. Just last month Imperial Tobacco bolstered its economy cigarette brand Carlton with the arrival of Superkings Menthol 19s for £6.40 plus a pricemarked pack at £6.19.

Capsule cigarettes, meanwhile, are continuing to storm up the sales rankings and are now almost level with traditional menthol cigarettes in terms of sales, accounting for 8% of sales and growing year on year.

“The growth of capsule technology is a key trend within the tobacco category,” JTI’s head of communications Jeremy Blackburn says. JTI now has three capsule cigarette brands to its name including Silk Cut Superslims Choice, Benson & Hedges Dual and Sterling Fresh Taste on Demand which, according to JTI, has a 42.9% share of the capsule market.

Retailer John Nathwani, who owns the Circle Service Station in Birmingham, agrees that capsule brands still have an “important role” to play on the gantry and says they have helped to re-energise his tobacco sales which had started to level out. “Sterling Fresh Taste on Demand has proved especially popular and is my best-selling capsule brand,” he says. “The competitive price point means I sell about 10 outers a week across both my 10s and 20s and I can only see this increasing,” he adds.

Vital statistics

Today’s smokers

More men smoke cigarettes than women

The proportion of women who smoke cigarettes fell from 19% to 17% between 2012 and 2013. There was relatively little change in this proportion for men, at about 23%

Unmarried people are almost twice as likely to be cigarette smokers as married people

The proportion who smoke cigarettes is highest among those with lower-level educational qualifications, unemployed people, those working in routine and manual occupations and those with low incomes

The highest proportion of smokers are people who earn between £9,000 and £19,000 a year

Electronic cigarettes (e-cigs) are almost exclusively used by smokers and ex-smokers. Almost none of those who had never smoked cigarettes were e-cig users.

Source: Office of National Statistics, November 2014


The summer cigar opportunity

Warm summer weather is known to boost cigar sales so now is the perfect time for stores to evaluate their ranges and ensure that they are best placed to profit.

James Higgs, head of marketing & public affairs at Scandinavian Tobacco Group UK, explains: “Good weather during summer can certainly boost sales of cigars as consumers are more likely to sit outside and enjoy a cigar. However, sales often peak during summer due to other factors outside of the weather such as celebratory occasions.

“As a result, it’s important for retailers to ensure they have a good range of cigars stocked at all times. For example, including larger cigars such as Henri Wintermans Half Corona and Corona Deluxe will allow them to capitalise on celebratory occasions, while stocking a selection of smaller cigars such as Café Crème and Moments will ensure they make the most of the increased number of smokers enjoying cigars in warmer weather,” he says.

Recognising the opportunity, JTI invested in a new pack design for its Hamlet cigar brand in April.

The new look is designed to celebrate the brand’s heritage by featuring fictional characters from the founders of the cigar factory which first made Hamlet cigars.

The Hamlet singles 50s drum was also made available in a half outer for the first time, providing retailers with a reduced cash outlay and lower stock-holding opportunity. Hamlet miniature 10s, meanwhile, have moved to a more compact tin format in response to demand from existing adult smokers.

Big names to remain key

Well-known brands such as Philip Morris Ltd’s (PML) Marlboro also look set to hold their own in the dark market. In fact, the start of the year saw PML invest in a striking new look and host of product upgrades across the Marlboro portfolio.

Marlboro Red, Gold, Silver Blue, Ice Blast and White Menthol all now feature a new look with “soft touch” finish packs.

The cigarettes also have new tipping paper designs and have been upgraded to include firmer filters which reduce the amount of ash that adult smokers get on their fingers when stubbing their cigarettes out.

While sales might be in slow decline, the premium cigarette segment still remains a relevant one. About one in four packs of cigarettes purchased in stores today come from the premium and sub-premium sectors, according to Imperial Tobacco.

“The enhanced profit margins provided by brands such as Davidoff, Embassy, Regal and Lambert & Butler mean they continue to be ‘must stocks’ for 2015 and beyond,” says Imperial head of independent retail Andrew Miller.