As cost pressures increase, adult smokers will be looking to achieve even greater value for money in the tobacco category.
by Gaelle Walker
As the cost-of-living crisis deepens, the year ahead could present a number of new and heightened challenges for Scottish tobacco retailers.
The buying habits of even the most loyal of adult smokers could well shift, as the need to make ends meet is heightened, making it more important than ever before for retailers to keep up to date with local trends and ensure that their range meets demand.
The illicit trade could also pose additional challenges to legitimate sales, as under-pressure smokers seek out cheaper illicit alternatives.
One thing is certain though: the trend towards value-priced tobacco will grow in 2023 as adult smokers seek out the brands which offer them the lowest price for their hard-earned pounds.
“Now more than ever, value tobacco is a key trend,” JTI’s Marketing Director Mark McGuinness says.
JTI recently re-positioned its Sovereign Blue brand, including King Size, Superkings and Sky Blue King Size to align with its ultra-value offerings as part of a pricing restructure across its Conventional Tobacco Products portfolio.
With price a key consideration for existing adult smokers when deciding which brand to purchase, Sovereign Blue’s RSP has changed to £10.65 – where it joins Kensitas Club as part of JTI’s ultra-value range.
“Price is an important purchasing factor for existing adult smokers and 80.5% of all sales volumes are currently in the value or ultra-value Ready Made Cigarette and Roll Your Own sector,” McGuinness adds.
“We’ve brought Sovereign Blue in line with our other ultra-value options to provide more choice of well-known brands to consumers at this end of the market. Shoppers will still receive the same high-quality Sovereign Blue product, whilst retailers can maximise the sales opportunity by offering this heritage brand at a new value RRP.”
And the trend towards value for money options will certainly not be limited to the cigarette and RYO categories.
Cigars
As STG’s UK Marketing Manager Nataly Scarpetta explains: “Now, more than ever, it is important for retailers to offer their customers a range of credible value options across the store, as the current cost of living crisis continues to put pressure on households and forces consumers to make difficult decisions on what they can afford to purchase.
STG has just re-designed its Moments range of value for money cigars in a bid to better highlight the brand’s ‘value and quality’ message to adult smokers.
“We’re really excited to launch our new look Moments range which we’re confident will appeal to those adult smokers looking for a high-quality value-for-money cigar,” Scarpetta, says.
“Historically Moments has under-traded in the convenience channel so we’d really encourage those retailers who don’t stock it to consider doing so, as many of your customers will be looking to down-trade to cheaper options,” she adds.
Scotland’s premier sniffer dog Boo has continued his pawtest against Scotland’s illicit tobacco trade by sniffing out a further haul of illicit cigarettes from an Ayr convenience store earlier this month.
The crime-fighting canine helped to seize 128 packets of illicit cigarettes worth £1,632 and a number of pouches of rolling tobacco worth around £789 from the store, which had been reported by members of the public.
It comes after Boo sniffed out around 200,000 counterfeit cigarettes from stores across Glasgow in late 2022.
He also uncovered £1,500 of fake tobacco from a store in Perth in September.
In July, Boo set a record for the most illegal cigarettes seized by a trading standards team in Scotland, when he uncovered 447,000 cigarettes, worth an estimated £134,000 from three premises in Kilmarnock.
Heated tobacco
Cost pressures could also make 2023 a defining year for the UK’s growing smoke-free category, as Kate O’Dowd, Head of Commercial Planning at PML in the UK and Ireland O’Dowd explains: “2023 will be the year of the multi-category, whereby retailers should offer affordable smoke-free choices that don’t compromise on taste, quality, or satisfaction for the user.
“With HEETS tobacco sticks costing less than half the price of an average pack of cigarettes, IQOS Originals Duo offers customers a real tobacco alternative and cigarette-like satisfaction, at a fraction of the price of smoking.
“From the race to switch adult smokers to alternative products between convenience retailers and large multiples, to the speed by which manufacturers and their brands are developing and commercialising the most innovative products to meet growing demand – everyone, it seems, is feeling the heat.”
Smoking rates in Scotland have continued to fall, with 11% of adults identifying as current smokers in 2021, down from 17% in 2019, the most recent edition of The Scottish Health Survey reveals.
The figure represents “a substantial decline” since 2003, when the survey began and when 28% of adults identified as ‘current smokers’.
The survey also found:
- Twelve per cent of men and 11% of women identified as smokers, down from 16% and 19% respectively in 2019.
- Smoking prevalence was highest among those aged 45-54 at 16%, followed by 35–44-year-olds at 13%.
- Prevalence was lowest among those aged 75 and up, at 5%.
- Current smokers were smoking an average of 10.5 cigarettes per day in 2021.
- In 2021, smoking prevalence continued to be higher among adults living in more deprived areas than among those living in less deprived areas (24% and 5% respectively).
Source: The Scottish Health Survey 2021
