70
TOBACCO BUSINESS
MARCH/APRIL 2014
Tobacco Categories
Vying for C-Store Share
With cigarette sales continuing to slip, where will retailers turn?
By Jennifer Gelfand
T
he c-store retail sales landscape
is continuing to shift. Cigarette
sales in convenience stores
dropped another .9 percent in 2013
according to research by Balvor/
Convenience Store News
.However, smaller
tobacco categories including electronic
cigarettes, pipe tobacco, smokeless and
cigars saw a bump in sales, suggesting
that retailers may need to evolve with the
changing demands of tobacco consumers.
Both moist snuff and snus gained
ground in c-stores last year, with sales
boosts of 7.9 and 2.9 percent, respectively.
“Obviously the increase in smoking
restriction has been a challenge for [all
combustibles],” says David Bishop,
managing partner of Balvor, a Barrington,
Illinois-based sales and marketing firm.
“You’ve seen an explosion in smoking
bans since 2009—dramatic changes in
where you could smoke, whether that
be a cigarette or cigar. As those changes
occur, so does the behavior of smokers.
The headwind for combustibles becomes
a tailwind for smokeless.”
This trend might also seem to lay the
groundwork for the already growing
popularity of electronic nicotine devices
(e-cigarettes, e-cigars, etc.), which emit
vapor rather than smoke, to gain even
more momentum. However, Bishop is
quick to note that the same legislation
banning cigarettes may soon pertain
to electronic alternatives as well. “We
are facing the [way of ] thinking, ‘If it
walks like a duck, looks like a duck and
acts like a duck, it must be a duck.
’
So
places like New York City are enacting
bans on e-cigarette use, and New
Jersey is considering a statewide ban.
Clearly, e-cigarettes are not immune to
restrictions.”
What is a c-store retailer to do in
the face of shifting consumer demand
coupled with an uncertain regulatory
future? With sales of electronic cigarettes
up 67.9 percent in 2013 and industry
observers painting a rosy picture of
their future potential, many retailers
have opted to expand their offerings of
e-cigarettes and take their chances with
what looms on the regulatory horizon.
In fact, 80 percent of them increased the
number of brands offered since last year.
However, research shows less than one-
third of retailers intend to expand shelf
space devoted to other tobacco products
this year, Bishop says. That reluctance
stems in part from concerns about taking
space from cigarettes and the potential
effect on retail contracts. “The balancing
act,” he says, “is complicated by the fact
C-STORE CORNER
