When the focus seems to surround legislation and the illicit trade it can be easy to forget how vital a part tobacco plays in a c-store, prompting SLR to look at the positive side of a category that usually finds headlines for the wrong reasons. by Kevin Scott
Window of Opportunity – Checklist Q Monitor sales data to identify key brands and then order enough stock to ensure full availability until the next delivery. Retailers need to understand their peak times and days for tobacco purchasing and ensure their unit is restocked prior to these periods Q Ensure your tobacco unit has the correct planogram implemented and all lines have the correct price displayed Q Consider placing reminder cards on autofeeds so that staff are aware of what product goes in each space Q Keep a customer request book for new products to you don’t forget them on your next order or trip to the cash & carry.
Window of Opportunity – Checklist
- Monitor sales data to identify key brands and then order enough stock to ensure full availability until the next delivery. Retailers need to understand their peak times and days for tobacco purchasing and ensure their unit is restocked prior to these periods
- Ensure your tobacco unit has the correct planogram implemented and all lines have the correct price displayed
- Consider placing reminder cards on autofeeds so that staff are aware of what product goes in each space
- Keep a customer request book for new products to you don’t forget them on your next order or trip to the cash & carry
Capsules take off While the recently proposed EU Directive on tobacco would see technology like capsules in cigarettes banned, their future is far from clear and for the moment retailers should be taking advantage of a technology that has generated over £15m in retail sales value. Imperial Tobacco’s Gayatri Barua-Howe comments: “Lambert & Butler Fresh Burst gives adult smokers the opportunity to squeeze a capsule in the filter to release fresh burst of flavour.” Elsewhere, Since launching Silk Cut Choice, JTI has brought a further two capsule cigarette brands to market – Sterling Fresh Taste on Demand and B&H Dual. Another popular brand in this growing area is Marlboro Ice Blast, which offers a cooling flavour from the start.
Keep fighting the illicit trade, says industry Much of the attention on the tobacco category at the moment focuses on the illicit trade. While this is unfortunate, it is unquestionably part of the industry and retailers are therefore part of the solution to stamping out this illegal and harmful activity. The latest ACS data on the scale of illicit and crossborder tobacco consumption in Scotland indicates that the retail trade missed out on an estimated £300m in sales last year, equivalent to £24,000 in lost turnover for each of the 5,400 small shops operating in the country.
The results are derived from tobacco industry surveys for Scotland which show that 11% of cigarettes and 42% of hand rolling tobacco was either illicit or crossborder shopped in 2012, representing a tax loss to the Government of an estimated £230m. Separately to this JTI conducts test purchasing for illicit tobacco products across the UK and recent work in Scotland shows that illicit cigarettes and RYO are cheap and widely available. Cartons of 200 illicit white cigarettes were bought for £30, single packs for £3.50 and 50g of RYO for £6.50. JTI’s Jeremy Blackburn says: “The most recent figures from HMRC show that tobacco smuggling (cigarette and RYO) caused up to £2.9bn in lost taxes, as well as a considerable loss of sales, revenue and profits to retailers.
JTI estimates that non-UK duty paid cigarette consumption, which includes smuggled product, increased from 17% in 2011 to 21% in 2012. Further increases on tobacco tax in next year’s Budget will only exacerbate what is already a very serious problem. We believe that other policy initiatives intended to reduce smoking – such as the implementation of the Tobacco Display Ban, and measures contained in a revised Tobacco Products Directive – will only lead to more communities across the UK becoming swamped with smuggled and counterfeit cigarettes.” Imperial Tobacco Anti Illicit Trade Manager Peter Nelson comments: “It is vital that the whole tobacco supply chain stands up to this problem to help safe guard the livelihoods of hard working Scottish retailers and protect our communities from this criminality.
If you suspect someone’s selling illegal tobacco I urge you to report it to your tobacco rep or the Customs Hotline on 0800 595000. However small the piece of information retailers’ may have, it is vital that they inform the Customs Hotline as it could assist with other intelligence they may have been given.” Ronald Ridderbeekx, Acting Head of Corporate and Regulatory Affairs at BAT UK & Ireland, says: “Ill-thought through regulation, like plain packaging and the proposed revisions the the Tobacco Products Directive, brings with it the very real threat of serious unintended consequences, such as a rise in the number of smokers willing to turn to the black market which, in turn, can have a negative impact on UK jobs and the economy. Plain packs also play right into the hands of the counterfeiters who are ready and waiting to supply people, regardless of their age, with cheap tobacco products.”
The big 5-0 for Café Crème The cigar market has cause for celebration this year with the 50th anniversary of the Café Crème range. The STG UK brand has four variants in the top 20 cigars, and dominating the miniature market, it’s a must-stock brand for retailers. Those big four are Café Crème Blue, Café Crème Original, Café Crème Filter Arôme and Café Crème Express Blue, which are positioned at places one, four, seven and 13 on the chart. The cigar market is similar to cigarettes in more way than one, as Alan Graham, Head of Marketing at Scandinavian Tobacco Group UK, points out. “In addition to offering consumers confidence in the brands they buy, providing value for money is now essential in almost every tobacco category. As consumers’ disposable income continues to decline, we’re now seeing the trend extend to more premium categories such as Cigars. Despite being traditionally perceived as premium products, cigars offer Scottish retailers a huge opportunity to take advantage of the demand for VFM products.” In line with this growing demand for VFM cigars, the Miniatures cigar segment has gone from strength to strength, with it now accounting for almost two thirds of the entire cigar category.
