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Remember Where You Came From

By Melissa Kress - 09/11/2018

It's undeniable that there has been a shift in the convenience store industry, away from the traditional smokes-and-cokes retailer and toward the convenience foodservice retailer. Anyone who has attended a NACS Show in the past five years has seen the evidence.

However, as the channel evolves to meet the needs of today's consumers — needs that focus more on fresh and healthy choices — c-store operators should not forget what brought them to the dance, so to speak. And that's cigarettes.

Yes, cigarette volume is declining. And yes, retailers need other merchandise categories to pick up the slack. That those categories bring higher margins is a bonus. But as Management Science Associates Inc.'s Don Burke points out, declining trends in cigarettes do not paint the whole picture of the backbar. Today's adult tobacco consumers may be buying less cigarettes, but they are not buying less tobacco; they are just buying other tobacco items.

While the convenience channel is busy upping its fresh-and-healthy game, it could be in danger of losing the already-tight tobacco dollar — with dollar stores ready to swoop in.

The story is in the numbers. According to data from Management Science Associates, total nicotine volume was up 12 percent in U.S. dollar stores in 2017, the only retail outlets to see volume increase from 2016. Distribution in dollar stores was up nearly 21 percent.

Protecting the backbar will take some work on the part of convenience store retailers and suppliers, but it can be done. A few tips include ensuring you have the right assortment, checking out your competition's tobacco set, and carrying exclusive brands.

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