Tobacco is the most regulated product in a retailer’s stock. Whatever the case for or against, tobacco remains a key part of the convenience store business. The category is both a sales driver and therefore great for cash flow, and brings valuable footfall, increasing sales and overall basket spend.
by Émer O’Toole
In about four months, by the transition day on 20 May, all tobacco sold in Scotland must comply with EUTPD2 and UK plain pack rules. While retailers are legally obliged to make sure they properly understand the new regulations, they also must ensure that the category continues to earn its place in the most visited area of the store.
Regardless of the impending legislative changes, however, it remains just as important that retailers don’t lose sight of the category management fundamentals: ranging and availability. As good retailers agree, the best way to keep accessories front of mind is to offer a proven, core range to customers, supported by well-established brands and products, as well as stocking NPD that reflects recent market trends. This not only helps to drive profits, but will also help retailers to differentiate from their competitors and bring in repeat consumer traffic.
Where does the future lie, now we are entering the post-display, post-minimum pack size environment? RYO will see some of the biggest changes, not just a move to minimally branded standardised packaging, but also a hike for minimum permissible packsize to 30g. Jeremy Blackburn, head of communications at JTI, says: “With the introduction of TPD2 and plain packaging we are entering a new phase – and it is difficult to predict the actual date when TPD2 stock will appear on shelves for specific brands.”
Retailers are encouraged to ensure they maintain a good selection of brands across all price segments, to cater for the needs of their existing adult smoker customers and remain a destination of choice. The Value price sector which includes Value, Super Value and Ultra Value segments, holds a 55.4% volume share of the total RMC market and JTI has a number of brands which cater towards this trend including Sovereign, Sterling and B&H Blue. While the Value sector is showing growth, retailers will be monitoring the whole category over the coming year, as the fundamental changes to tobacco retailing take effect on their own businesses, and how that new framework sits with their business plans.
Research from Palmer and Harvey reveals that a third of retailers still have not heard of the EUTPD2, so educating yourself and your team before the deadline will be crucial to maintain tobacco sales. JTI maintains an education website at www.jtiadvance.co.uk.
- With staff accustomed to where stock is currently merchandised we are recommending that retailers do not drastically change their planograms. With all the other changes that are taking place significant alterations to where brands are stocked will put even more pressure on your staff.
- Training will become increasingly important as staff who are familiar with the gantry layout and knowledgeable about the products and legislation will aid a store in being compliant and guide customers through the changes, helping to secure repeat custom and avoid confusion.
- Our advice to retailers is to use the principles of ARTIST (Availability, Range, Training, Innovation, Sales, Technology), with a particular focus on availability and range to manage the category successfully and ensure their stores remain a destination for existing smokers.
