A Taxing Time for Tobacco

Last year was truly a difficult time for tobacco. The State Children’s Health Insurance Program (SCHIP) increased tobacco taxes from a “modest” 158% increase on cigarettes up to a hideous 2,000 plus percentage increase on roll your own tobacco and small cigars. (RYO went from $1.10 per pound to $24.68 and small cigars went from

Smokeless Sales Stay Strong

Sorting through all of the dynamics at work in the smokeless tobacco category is proving a complex calculation for convenience store operators and consumers alike. For example: retail prices rose with the April 1 passage of an increase to the Federal Excise Tobacco (FET) tax to fund an expansion of SCHIP, the State Children’s Health

People Make the Industry

When we decided to acquire Convenience Store Decisions from Penton Media nearly two years ago, we did so with an optimistic view of the convenience channel. The dynamics of the industry and its long-term growth prospects in terms of demographics, population expansion in key market areas, the range of needs it fills on a daily

What’s in Store in the Humidor

As if the turbulent economy, rising state taxes and local anti-smoking regulations hadn’t rendered the retail cigar landscape dangerous enough, enter the U.S. Food and Drug Administration (FDA), which wants to significantly reshape that landscape, but so far hasn’t told anyone—most notably the retailers that will be selling the products—how. Some background: The law granting

Dipping Into New Profits

In a market plagued by high taxes, declining gross margin profits on cigarettes and the likely possibility of FDA restrictions on tobacco, retailers more than ever need to manage the tobacco category more closely. It’s no secret that the smokeless category has been growing, with big year-on-year gains in new product sales, flavors and line

Wild Ride Continues for Cigarettes

Once again, cigarettes dominated in-store sales, accounting for nearly one in every three dollars spent in stores, but cigarette gross margins continued to plummet, falling to 15.3%. These low cigarette margins dropped the category to third in terms of gross margin contribution (16%) behind foodservice (23.9%) and packaged beverages (16.6%) Margins promise to continue falling

Concerns Abound for Cigars

The war over tobacco taxes to pay for an expansion of the State Children’s Health Insurance Program (SCHIP) ended on February 4 when Congress passed the Senate’s version of the bill and new President Barack Obama signed it into law. What that means for c-store operators who sell cigars in an era of a rough

Cigarettes

TOP PERFORMERS Philip Morris USA R.J. Reynolds Tobacco Co. Lorillard Tobacco Co. HONORABLE MENTIONS Commonwealth Brands Inc. Liggett Vector Since the 1998 Master Settlement Agreement (MSA), tobacco taxes and sales from tax-free sources continue to plague the convenience store industry. Cigarettes continue to be the top in-store category based on sales dollars. On a monthly

The Tax Train Keeps Rolling

January could not end soon enough. The industry hasn’t seen such a tumultuous month since November 1998 when Congress first turned to tobacco as its financial panacea. Big Brother was at it again last month with the U.S. Senate passing the State Children’s Health Insurance Program (SCHIP)—including all of the cigarette and tobacco tax rate

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