48
TOBACCO BUSINESS
JANUARY/FEBRUARY 2014
ongoing expansion. “Our goal is to
saturate the Michigan market with our
unique concept,” says Justin Samona.
“Our plan is to open 12 to 15 stores
a year, just as we have the past few
years, and we currently have four under
construction.”
The company also plans to have
continued success in 2014 with its
private label lines.Last year,it introduced
its own line of electronic cigarettes, as
well as its own RYO pipe tobacco
and “both were a major success,”
according to Samona. “We are
expanding our private labels to
another super premium RYO
blend, [plus] filtered tubes,
filtered cigars, premium cigars,
bundle cigars and smoke odor
candles.”
cigarEttEs
still thE Bulk
When Illinois raised its state
cigarette excise tax last year, Smoke
Shop in Dyer, Indiana, benefitted
because of the increased border business
in its Indiana and Michigan stores,
according to Gary Tapley, general
manager of the 29-store chain. “We are
still doing a good business in regular
cigarettes; sales are down as far as
number of cartons fro a few years ago,
but the bulk of our business is still in
cigarettes,” he explains.
The other high for the chain is e-cigs—
“something I was wrong about,” Tapley
says. “I didn’t think we would do much
with it last year, but I have to admit, it’s
getting bigger and bigger. It’s a growing
segment and we’ve beefed it up now. RYO
and pipe tobacco has pretty much leveled
off, but e-cigs are definitely growing.”
Tapley’s biggest challenge is that “it’s
hard to grow without adding new stores,
and I’m not finding new, good locations.
Plus, you need deep pockets to do it, and
we’re a fair trade state in Indiana; I like
that and wouldn’t want to lose that,” he
adds.
Looking ahead to
this year, Tapley is realistic in that he’s
not expecting any bottom-line miracles.
“Hopefully, we can just maintain what
we got—being stable would be good for
2014,” he admits. “But as I always say, we
live in paradise here, and a lot of people,
especially in the tobacco industry, just
don’t realize it. I tell them to go live in
Afghanistan and then come back. They
will change their tune.”
a statE lEgislativE coup
Darren Collett, owner of the
26-store chain Collett Enterprises in
Seymour, Indiana, was on a legislative
high as 2013 came to a close. He and
his company reportedly worked with
its state legislators to introduce and
pass a bill requiring any person(s),
including online retailers, who are
selling and/or shipping a tobacco
product into the state of Indiana
to register and obtain a license
from the state. Additionally,
all Indiana tobacco purveyors
are now required to collect
and remit OTP tax to the
state. “While the state of
Indiana is still perfecting the
enforcement of this bill, the
groundwork has been laid and
we believe the benefits will begin
to show in 2014,” Collett reveals.
More good news came in the
form of non-combustibles, such
as moist snuff and e-cigarettes/
e-liquids, which were “by far,
the driving factors attributing
to our sales growth in 2013,”
says Collett. “Many of our back
bars have been remerchandised to
highlight our e-cigarette/e-liquid and
moist snuff categories.” Additionally,
the chain has expanded the number of
SKUs offered in these categories.
“In addition, the privatization of the
Hoosier Lottery helped increase lottery
sales through a variety of promotions,”
Collett reports.
The biggest 2013 challenge Collett
named was the narrowing of the price
“I cannot see
our company ever
completely walking
away from
the tobacco
category as it
has been our
backbone since
day one.”
