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58TOBACCOOUTLETBUSINESSMAYJUNE2010althoughitdoesnx19tdonearlythevolumeasthemainstore.Underthedirectiono-triballeadershipCowansupervisesthethreelocationsandabout50generalemployeesandeightmanagers.Testoresstockawidevarietyo-tobaccoproductsbuttherex19snoquestionthatcartoncigarettesmakeupthemajorityo-salesandoneo-thebusinessx19skeystosuccessisalow-marginhigh-volumeinventoryturn.x1cOurtypicalcustomerdoesnx19tbuyapacko-cigarettes.Teymaybuythree-ourorx2vecartonsatatimex1dCowansays.Testoreshavebuiltaloyalcustomerbasethroughaggressivepricingandpromotionscustomerserviceandtheabilitytostockawidevarietyo-cigarettes.x1cTatgivesusaspecialopportunitywehaveabout50brandsx1dCowansays.x1cManyarehardtox2ndanywhereelse.x1dADIVERSEMIXCowanestimatesthemainstorex19ssalesx1oorisabout15percentdedicatedtogroceriessnacks15percenttosmokeless15percenttoRYO5percenttox2lteredcigarsand50percenttocigarettes.TestorecarriesimportedcigarettessuchasExportx1cAx1dandpremiumbrands-romPhilipMorrisUSARJRandLorillard.Testorealsocarriesvaluebrandssuchastribalbrandsand-ourth-tierbrandsallapprovedundertheMasterSettlementAgreementMSAbythestateo-Nevada.Testoresells15brandsbythecarton-orunder26anout-the-doorprice.Inastatewhereacartono-premiumcigarettesmayretail-or50to60thatx19sarealbargain.x1cTatx19sthebulko-ourbusinessx14thelowendx1dCowansays.x1cWecatertotheprice-consciousconsumer.x1dUniquelythemainstoredoesapproximately20percentto25percento-itsbusinessthroughtwodrive-throughwindowswhichsellonlycartoncigarettes.Employeesradioacustomerx19sorderupstairstothewarehouseandotheremployeesdroptheorderdownasha-ttothecustomerx19scar.x1cCustomersespeciallylikeitinthesummerwhenitcangetupto110degreesherex1dCowansays.x1cTerearetimeswhentheyarelinedup-ourtosixcarsdeep.x1dTesmokeshopalsocarriesabout30typeso-smokelesstobacco25typeso-RYOandeighttypeso-x2lteredcigars.SCHIPpromptedthestoretomoveintoRYOandCowanestablishedax1cRYOcenterx1dthat-eaturesthecategoryinoneareao-thestore.Cowansayshex19sbeenscalingbackonx2lteredcigarsbecauseheanticipatesanFDAbanonx1avoredx2lteredcigars.Intheadjacentcigarshop95percento-thesalesx1oorisdevotedtocigarswithabout1200typesandtheremainderisdevotedtopipetobaccomostlyprepackagedblends.x1cCigarettesmakeupabout85percento-ourvolumebutwealsodoasolidbusinessinthecigarshopx1dCowansays.Tecigarstorecatersprimarilytoadiferentclientelethanthesmokeshopnextdoorascigarsaremoreo-aluxuryitem.Evenwiththedownturnintheeconomyhoweverthecigarstorehasper-ormedwell.x1cWearerunningabout20percentoverthelast-ewyearsx1dCowansays.x1cButsomeo-thereasonsarenotsopleasant.Aloto-localshopshavegoneouto-businessoverthelast-ewyears.ButIalsoattributeoursuccesspartiallytothestockwekeepandemployeetraining.x1dPipetobaccosalesissomethinghex19sworkingtoimproveCowansays.x1cOneareathatwedonx19thaveexpertiseinispipetobacco.Wedonx19thavethespacetodoourownblendsandwedonx19thaveanexpertwhocanblend.Tatx19soneo-ourweaknesses.x1dCowanhasexpandedthestoresx19accessoryselectionsextensivelyduringhistenure.Temainstorestocksdisposablelighterstorchlighterscigarettecasescigarettesnufersandnoveltyandportableashtrays.Inthecigarstorespace-oraccessoriesislimitedbutitdoescarrylighterscigartravelcasesdesktophumidorscutterscigarashtraysandhumidix2ers.InaccessoriescigarettesnufersarethebiggestsellersandthestoresalsodoatremendousvolumeinAcigarshopadjacenttothedrive-throughoffers1200cigarbrands.