Page 22 - TOB Magazine Jan/Feb 2013

46
TOBACCO OUTLET BUSINESS
JANUARY/FEBRUARY 2013
consumers.Maintaining the proper product
mix in our stores, at competitive pricing,will
continue as a challenge facing many of us
retailers in the coming year.
MCCOY: Our market is currently
experiencing extrememargincompression
within the cigarette category. Our biggest
challenge is managing the lower margins
while maintaining overall profitability. I
believe this will be the same challenge we
face in 2013.
SCHWARTZ: Staying
passionate about this business is my
biggest challenge. To find passion
in an industry that’s as hated
as it is, it’s a daily struggle. I’ll
never get asked to go to school
and talk about what I do for
a living. I have four young
children and I want them to
be proud of what I do. I asked
them who wants to take over
daddy’s business, and none of
them raised their hand. Back
at my desk, I never get an
industry email announcing
great news. There’s a lot of
negativity all around. It’s
hard to stay positive but that’s
still the goal.
SILVERMAN: The
biggest overall challenge
was maintaining our volume
as a result of the increase in
competition, primarily from the
RYO filling station stores, along
with increased competition from
convenience stores and dollar discount
stores. I think the challenges for 2013
are what regulations lie ahead. What
will happen to pipe tobacco? What will
happen to cigars? What will happen with
flavored tobacco products in general?
Regarding RYO
TOB: Was the federal ruling that
classified retailers with RYO filling
machines as manufacturers a positive or
negative from your perspective?
MAHONEY: It was negatively
heartbreaking for us. We did very well
with the machines and when they were, in
essence, outlawed, it really decreased our
revenue immensely. The RYO category
that consumers make at home, however,
is still positive and always something to
be happy about.
SCHWARTZ: We applaud that the
government woke up and did something
about the RYO filling machines because
they were destroying family-run retail
tobacco businesses that have been
around for decades. Thank goodness
they destroyed the fly-by-night RYO
businesses that were destroying our
industry.
SILVERMAN: It was positive for us
as we were losing volume to stores with
these machines that were popping up all
over. We were losing customers to these
stores. It was not so much a surprise that
the ruling occurred but more how quickly
it happened. I expected it to take longer
to work its way through the legislative
system.
Tobacco’s Next Generation
TOB: What is your attitude on the
THR (Tobacco Harm Reduction)
category, including electronic
cigarettes? Do you believe this to be the
future of the tobacco industry?
COLLETT: I don’t know that it is the
future of the industry, but I think THR
products will be key in the mix moving
forward as consumers become more
educated and as the technology becomes
more refined and accepted.Accepting that
these products are less harmful will be on
the increase. People will gain knowledge
that moist snuff is less harmful than a
cigarette, for example. As consumers gain
more knowledge, I believe the category is
Continued on page 50
“We believe there
is great opportunity
for growth in the
tobacco outlet business.
As convenaience stores
continue to reduce
SKUs, our variety
will entice the adult
tobacco consumer
to shop in our
stores.”