Lighters Lead Tobacco Accessories

tobacco assessories lightersAs turbulent as the tobacco business has been in recent years, accessories, such as lighters, have remained calm and consistent, if not a bright spot on the front counter for most convenience store chains.

“This is one of the most profitable parts of the business,” said Tariq Khan, CEO of Sentar Oil Inc., a four-store chain based in Rockville Centre, N.Y. “I always feel that the more lighters we sell, the better our overall business is.”

Lighter sales at convenience stores increased a solid 2.76% to $538.61 million, according to Information Resources Inc. (IRI) for the 52 weeks ended Dec. 29, 2013. Smoking accessories, such as pipes and rolling papers, dipped 1.66% to $251.56 million.

The revenue generated by accessories is increasingly needed by retailers. The next year or two, as far as Khan can discern, will be filled with ever more taxes and regulations aimed at anything connected with the tobacco business—which are two elements convenience store operators have been concerned with for more than a decade.

Lighters sit at the center of a host of products categorized as tobacco accessories, Khan pointed out. “A lot of stuff goes with it. A lot of suppliers are coming up with accessories, such as key chains with lighters carrying logos of (sports) teams and other things. Things like that are very popular and profitable, because you can sell them for $1 or $1.30. If you sell 20 of them a day, a few hundred a month, that’s a lot of money.”

Convenience stores will continue to do well with these accessories, in part, because they require relatively little space. “It’s not more than maybe three, four, five feet of space, mostly behind the counter, so we can control it, so it’s not walking out the door,” Khan said.

Themed lighters, like those offered by category leader BIC—promote sports teams, the military, movies, TV shows, clever catch phrases, designs and more. When these products are launched, they generate excitement with consumers and tend to be immediate big sellers. “People love novelty,” Khan noted.

Staying on Trend
Ana de la Torre, category manager for tobacco and general merchandise at Mapco Express in Brentwood, Tenn., said she sees specialty lighters, such as BIC’s Duck Dynasty or Flicktacular lines, growing in the years ahead.

Similarly, rolling papers will remain a big seller. “They are also highly profitable,” said Khan, a former national chairman of the National Coalition of 7-Eleven Franchisees. “Like lighters, anything to do with a pipe or tobacco category is a good, profitable item,” he said.

One area where Khan has soured, however, has been on sales of cigarette rolling papers. “In my market of New York, the roll- your-own segment is being discouraged, as it is in many states nowadays. That makes for a tough long-term outlook,” he said.

Overall, the key to maximizing growth in the tobacco accessories category going forward is for retailers to continue to expand their variety. “This is one area in which you don’t need all that much space, so if you can offer consumers more of a variety, the chances are that you are going to be selling more,” he said. ◆

Shining a Light on Tobacco Accessories

While it’s a relatively small category for c-stores, tobacco accessories are proving to be an extremely stable and profitable segment for operators, led by lighters, which recorded more than $538 million in sales in 2013.

                                           Dollar Sales    Sales % Change    Unit Sales    Avg. Unit
Lighters                           $538.61 Mil            2.76                368.49 Mil    $1.46
Smoking Accessories    $251.56 Mil           (1.66)               160.25 Mil    $1.57
Source: Information Resources Inc. (IRI), Total U.S. Convenience AllScan, 52 Weeks Ended Dec. 29, 2013

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