Tobacco Business

[ 74 ] TOBACCO BUSINESS [ JANUARY / FEBRUARY | 22 ] and the variety of products in our stores it is hard for our employees to spend the time needed to discuss and promote the new brands. For those reasons, our locations do better selling major manufacturer brands, with a good variety of top-selling boutique brands. What’s your store’s best-performing product category right now? Nolan: We have many that trend with the rest of them; however, we have been very strong with roll-your-own since the beginning. Because taxes are so high on cigarettes, the average pack of cigarettes costs $9 to $14 per pack. We show customers how to make a pack for less than $2 with roll-your-own tobacco. Weiner: The cigar category is performing at a high level of growth for our company currently, achieving about 15 percent growth annually. Since the pandemic, it has been difficult to keep many of the popular items in stock, so we have had to adjust our ordering parameters, ordering larger amounts to keep them on backorder and ordering other similar style brands to fulfill the customer demand. Reesor: Cigarettes are No. 1, and roll-your-own is still a really high percentage of our sales. We have an older generation that comes in, and they’re really looking for that product. We offer a large selection of tubes and of loose tobacco that customers can purchase and roll their own cigarettes. We’re really growing the disposable vape category in our stores too. It’s something that’s taken a little bit to catch on. People are starting to see that we can offer a great price and that we’re super competitive. Are you incorporating newer product categories such as hemp, CBD and oral nicotine into your store? If so, how are these products performing compared to more traditional tobacco products? Nolan: Tobacco-free is a huge category right now and has numerous brands within it. We’ve had to narrow down the six brands we have to just three that we carry. Reesor: We’ve actually hadCBD available in our stores for quite some time. The CBD market is so saturated with products that it’s kind of confusing to the customer. We haven’t seen an increase in sales of these products. It’s decreased for the most part for us. We’ll continue to follow trends and see if there’s something out there that customers are really asking for or something that’s really taking the market by storm, but CBD for us has kind of dwindled down quite a bit. Greene: We were fortunate to partner with Swedish Match for the launch of Zyn and Kretek with the launch of Dryft. We have since grown the oral nicotine category with the additions of On!, Rogue and Velo. We continue to look at opportunities in select markets to further grow that category. CBD/hemp continues to be a product category of interest as we’ve introduced several product offerings and delivery formats. We work hard to educate our customer base about hemp/ CBD options as we look to grow that category. How are you increasing your store’s profit margins? Reesor: In the discount tobacco realm it’s tough. Luckily, we have a really good relationship with our mother business, which is a wholesale distributor. They don’t cut us any slack either. They sell stuff to us at the same price that they sell to everybody else. We try to upsell people and to do some promotions where if you buy a carton, maybe you’ll get a lighter. Our loyalty program makes it really easy to incentivize while also encouraging everybody to come back and visit us. With margins, if you take care of your customers, they’re going to try to take care of you, so that’s what we try to do. We continue to look for items that could help out the margins and the profit aspect for us. Gallagher: Obviously there have been a number of price increases in all the categories. We thoughtfully analyze the increases and the markets we are in and adjust accordingly, and in every case we have increased our own margins and penny profit. Tom Allen: Smoker Friendly has an established record of first- to-market products and staying with the newest technology and trends in the industry. We continue that by maintaining business relationships with major and emerging manufacturers and inventors and adherence to a bottom-up communication model that unleashes information flow to decision-makers. This allows for our diverse portfolio of products that routinely bring strong profit margins over traditional products in the tobacco industry. Nolan: Through proper promotions. We have seen a huge difference in using digital TV marketing. You can see a difference in purchases with the marketing that runs on digital screens in our stores. Despite the FDA's crackdown on the category, disposable vapes continue to drive profits for many smoke shops and other discount tobacco outlets.