Bestway has had a long relationship with Gallaher so when it was seeking a tobacco company to assist members of its Best-one symbol it was natural that it should turn to Gallaher. James Hall, business development controller for Best-one, says that tobacco is an important part of the sales mix for Best-one and the partners work closely together to ensure members get the most out of the category.
The support usually kicks in as soon as retailers join the group, says Hall, because most new members, even if they are joining from another symbol group, install a new tobacco gantry. Best-one provides guidance on the size of gantry appropriate for any particular store and then Gallaher uses its market knowledge to develop a planogram tailored to the store’s size and catchment.
Once the store is trading, representatives from Gallaher’s 200-strong field force make regular calls to help the retailers maintain the planogram and to keep them informed about developments in the market. Oliver Michalski, Gallaher’s retail development executive with responsibility for Best-one, says if there are any out of stocks Gallaher’s sales team has a facility to put in an order direct to Best-one centrally, via fax or email, which ensures the stock will arrive with the retailer’s next delivery.
Michalski, Hall and Best-one’s tobacco buyer Sikander Abbas also liaise regularly to review tobacco sales through the group and to develop activities to boost them.
The most recent activity was an exclusive offer on Amber Leaf rolling tobacco for Best-one members. It was designed to encourage the retailers to tap into a recent insight from Gallaher that consumers are tending to trade up to larger 25g and 50g packs.
Price-marked activity for the 25g and 50g packs, offering higher margins, was introduced to encourage retailers to trade up. The 12.5g pack was price-marked £2.65, giving a profit of 17.1%, the 25g pack was price-marked £5.25, giving a profit of 22.6% and the 50g packs were price-marked £9.49, giving a profit of 29.4%. Hall says: “This is a very good deal and take-up has been excellent. It has given retailers a good margin to encourage them to sell it through, and then once it has gone they will go back to the standard price.”
Avtar Galsinh manager of nine Best-one stores, London
“Two business development reps from Gallaher visit us and are very helpful. They keep me informed about things like the changes in legislation.
“The proposed ban on displaying tobacco would have a severe impact on our business and on smaller retailers, but the big stores will be able to absorb the cost of the changes. The price-marked activity on Amber Leaf has worked extremely well. We didn’t stock all the sizes, but we’ve rolled them all out across all our stores.”
Vijay Perera Best-one,
“Tobacco is our top selling line, even though the smoking ban last year pushed sales down a bit. Because of where we are, our customers are mainly tourists and exhibitors at the exhibition centre, with a few regular customers from nearby offices.
“Price-marked packs make a big difference, and tourists don’t seem to be brand conscious. When there’s a price rise, people cut back or change to rolling their own for a while, but they soon go back to their usual smoke.”
Abdul Hameed Best-one,
“Our store is a small 24-hour supermarket with a wide range, so while tobacco is important it’s not such a big proportion of our business as it is with some shops. We have customers from a wide range of nationalities so we have a wide range of cigarettes to cater for all their preferences. Price-marked packs are popular with customers because they think they’re getting a good deal. If they ban display of cigarettes we would just have to deal with it.”