OTP Continues To Grow As Cigarette Volume Diminishes

The largest in-store sales category, cigarettes, is expected to experience continued flat or declining volume this year as the cost per carton continues to skyrocket. Barring additional tax increases, the average price for a carton of cigarettes will rise from $52.46 in 2010 to $53.46 in 2011. This year's forecast is for a national decline from 1.32 billion to 1.31 billion cartons sold, while per-store c-store volume declines by 0.4 percent.

OTP, or Other Tobacco Products, will once again be the fastest-growing product category in the convenience store. OTP unit volume per store will skyrocket by 20 percent this year as punishing taxes and anti-smoking regulations drive more smokers to cigars (particularly cigarillos) and the smokeless varieties of tobacco.

The 2011 Forecast calls for a per store dollar gain of 9.5 percent for cigars, on a 3.1 percent unit increase. Convenience store sales of cigars and OTP also continue to gain in market share against food and drug retail outlets. C-store share of cigar sales increased from 92.5 percent in August 2007 to more than 94 percent in July 2010. C-store's share of OTP sales increased from 91 percent in August 2007 to 93.5 percent in July 2010.