Smoking restrictions, excessive taxes and competition from tax-free sources on Native American reservations and the Internet have proven to be three obstacles too big to overcome for most convenience store retailers. For Smoker’s Express, a seven-store chain based in Fairless Hill, Pa., these obstacles are merely gateways to new sales opportunities.
Nestled in Pennsylvania’s Lehigh Valley, most Smoker’s Express stores border a state with runaway tobacco taxes. Consider that neighboring New York ($2.75) and New Jersey ($2.58) rank one-two for the highest state cigarette excise tax rate in the country. Even Maryland ($2), a neighbor to the south, ranks sixth. The highest combined state-local tax rate is now $4.25 in New York City, pushing cigarettes to more than $9 a pack. The tax situation in these states has gotten so out of control that bootleg cigarettes are often sold in New York and New Jersey for $5 by street peddlers, known as $5 men. Pennsylvania, by contrast, ranks 21st in the country with a state excise tax of $1.35.
Enter Smoker’s Express. "There is some concern from customers that they don’t trust the product quality of the items available on the Internet, from reservations and certainly not in what they’re seeing on the street," said Jazz Patel, co-owner of the family-run chain with his brother-in-law, Ronak Patel. "Since Pennsylvania has such a drastically lower cigarette tax, we are able to attract a large share of out-of-state customers with all the tobacco brands they know and trust at a much lower cost."
Smoker’s Express stores are a tobacco paradise for customers. Stores offer a wide array of cigarettes, ranging from premium brands, generics, smokeless tobacco products, cigars and a strong roll-your-own offering, which includes accessories such as tubes, filters and roll-your-own cigarette machines.
"We have a very loyal following of customers that make a trip out here once a week or once a month and get everything they need. You can set your watch by them," Jazz Patel said.
Smoker’s Express’ Bristol, Pa., store ranks among the most progressive tobacco shops in the industry. The store has embraced about a dozen alternative nicotine-infused products such as electronic cigars, inhalers, hand gel and even nicotine water, which it packages neatly into the "No Smoke Zone."
"I think this is a sign of what customers are looking for," Ronak Patel said of the alternative offering. "We’re adding these items because there is a demand for safer, smoke-free alternative tobacco products. In a few years, I think these items could be as common as smokeless tobacco."
Smoker’s Express supports its tobacco offering with a variety of candy, gum and snack items. Each store also features a modest cold vault supplying carbonated soft drinks, juices, teas, bottled water and energy drinks.
"While tobacco is our focus, beverages and snacks are a good complement to our offering," Jazz Patel said. "We stick to strong name brands and keep the product mix fresh by trying new products as they become available. The strategy is pretty simple. We’re looking to sell customers more items every time they enter the store."