By Howard Riell, Associate Editor.
In simpler times, lighters were used chiefly as a means to an end—lighting up a cigarette, birthday candles or even restarting an oven. Today, however, with the growth of the tobacco accessories category, lighters have become an end in themselves: an expression of personal flair, team affiliation, lifestyle choice or political persuasion. Lighters offer a way for consumers to make a statement.
But convenience store operators have even more to keep in mind when managing this category, such as price points, profitability, seasonality, variety, promotional opportunities and merchandising strategy.
The category’s fortunes are also tied to those of the cigarette industry, which of late have been in decline. In August, for example, Indiana State Rep. Charlie Brown said he intends to propose a statewide smoking ban next session, a move that reportedly will enjoy the support of Gov. Mitch Daniels. “I’m a very big supporter of anything that helps people avoid cigarettes,” Daniels said. “I would say each year there’s been growing public support for (a ban) and so I think there’s a chance next year.”
What’s more, the lighter category itself has a history of controversy. Safety concerns have long dogged novelty lighter manufacturers and retailers and have even resulted in lawsuits. According to the U.S. Fire Administration, 19% of reported fires are caused by four-year-olds playing with lighters or matches.
In fact, the U.S. Consumer Product Safety Commission estimated that kids under the age of five playing with lighters cause 5,900 residential fires each year.
Despite the fact that many of those fatal fires were started with novelty lighters, only 14 states have enacted legislation to ban them. While all lighters imported or manufactured after 1994 are required by law to be child-resistant, enforcement has traditionally been spotty. Worse, many look, and are used by kids, like toys.
In many cases like this, the retailer can be liable for selling the lighter. For this reason, it is imperative that convenience store retailers work with reputable lighter manufacturers with proven safety records at retail in the U.S.
Satisfying Cigar Smokers
“Lighters are still a significant item for tobacco stores,” said Andrew Kerstein, president and owner of five Smoker’s Haven stores in Matawan, N.J., and chairman of the National Association of Tobacco Outlets (NATO). “As c-stores get more into cigars they need to expand their selection of accessories for these categories as well.”
Kerstein is not suggesting that c-stores begin carrying high-end lighter lines like Colibri, Xikar or Prometheus. “But there are plenty of novelty torch lighters and inexpensive torch lighters that c-stores should be looking at. For example, Jet-Line has a line of torch lighters that retails for $10-$15.”
Like with cigarettes, lighters that are merchandised with cigar smokers in mind should be marketed on the counter in close proximity to their cigar selection.
“This is a great impulse item,” Kerstein said. “I believe that the target consumers for these lighters are cigar smokers and also people who like to collect novelty lighters. I would think that $15 is the break point for a c-store. I would merchandise them on the counter or next to the cigars.”
There is, noted Matt Hieb, category buyer for Jacksonville, Fla.-based Gate Petroleum, which operates 76 c-stores, a great amount of profitability behind the sale of cigarette lighters. “It’s something you’ve got to have if you’re in the tobacco business. It’s just a great item at the counter, maybe the best other than maybe 5-Hour Energy at this point.”
Hieb called the average profit margin on lighters greater than that of the other merchandise his stores regularly carry, but comparable alongside that of other counter items. Gate carries only the BIC brand of lighters.
“We carry a lot of their specialty lighters, like the Luminere lighters and the grill (multi-purpose and outdoor) lighters, but only on a seasonal basis. For daily use we carry the BIC Classic and their mini-lighter.”
The chain also usually takes part in quarterly promotions with BIC’s limited-time offerings, like their Grips and Lizards. “Right now we’ve got the NFL lighters coming out, being that we have a big focus in Charlotte and Jacksonville to support the Jaguars and the Panthers.”
Gate keeps its lighter price points somewhere in the middle of the pack, running at $1.59 on a BIC Classic.
Zippo also appeals to personal style and consumer interests with strong promotional ties to NASCAR, this year rolling out the customized Zippo Jeep at the 2011 Zippo 200 NASCAR Nationwide Series race at Watkins Glen International.
Gate stops short of marketing its lighters to specific customer demographics, Hieb added. “It’s an across-the-chain program.” Indeed, lighter consumers are going in just the opposite direction, using their lighters as a canvas on which to display their individuality apart from any group affiliation.
“We don’t carry the extensive line, with Ed Hardy and all those others ones,” Hieb said. “But I can tell you a lot of the seasonal items and things that BIC puts out people really buy into. Being that we’re focused in the south they do sportsmen-related items, like camouflage lighters and things like that during the hunting season.”
Other seasonal products include patriotically themed designs like American flags or bald eagles during the run up to July 4.
“It’s really driven by where you live and what’s going on in the world, I think,” Hieb said, referring specifically to the Independence Day models. “It makes people proud to see. If you’re carrying an American flag lighter and it’s July 4, you feel like a real American.”
That seasonality may be the single biggest factor in boosting sales of lighters in c-stores. “Promotional opportunities are huge,” Hieb said. “Make sure you have ample inventory. I think a lot of retailers will probably run out. It’s an item you always need to have. It wouldn’t hurt to carry a little extra.”
Flair vs. Price
Colonial Pantry Ltd. in Champaign, Ill., has marketed its own proprietary branded lighter for more than 20 years, according to president John Miller. The 11-store chain sells them for 79 cents each. “There are some people who want an inexpensive lighter, and we might as well advertise.”
The stores also carry a full line of BIC lighters, about 15 SKUs in all. “We do well with both lines,” Miller said.
The choice of lighter—personal flair or price—will vary with the individual, Miller noted. “It’s like cigarettes. If you’re committed to generic cigarettes then that’s what you’re going to buy.”
But the choice of colors, styles, types, sizes, price point and design will remain this category’s greatest strength as it appeals to a growing audience.