Economists Offer 2010 Outlook

Economists presented both sides of the picture to retailers at the NACS State of the Industry Summit in Chicago this week. The 2010 NACS State of the Industry Summit marked the 40th anniversary of the State of the Industry survey conducted by NACS. When the survey began, industry sales were recorded at just over  $1

Selling Smokes Still Profitable

While foodservice sales are soaring, the tobacco category is still as important as ever. I heard recently that the the profit convenience stores derive from foodservice has overtaken that of tobacco. Now I’m right there with the rest of the industry in joining the deli revolution, but that does not mean that I’m ready to

Stop-N-Go Pulls Adult Magazines

Stop-N-Go, which runs more than 20 locations in North Dakota and Minnesota, has stopped selling adult magazines at its stores. The chain’s owner, Sheldon Ellig, told the Grand Forks Herald adult magazines were previously removed from six Stop-N-Go stores and other stores pulled the magazines from shelves this week. “We have had a number of

The Shack Pushes the Bounds of Convenience

As all convenience store chains look for innovative ways to drive sales as tobacco and gas margins decline, they might take note from an unlikely teacher—a small town store in Grandy, Minn., whose unique offerings are going to new lengths to meet consumer demands. Though only 1,100 square feet, “The Shack on 65” packs the

FDA Issues Final Rule On Tobacco

The FDA has released its final rules regarding the sale of tobacco. Retailers will need to be in compliance with these rules by June 22, 2010. Today’s action by FDA restricts the sale, distribution and use of cigarettes and smokeless tobacco, including provisions that:             •            Prohibits the sale of cigarettes or smokeless tobacco to

7-Eleven Joins NATO

NATO, the National Association of Tobacco Outlets, announced that 7-Eleven Inc. has joined NATO as a retail member.  Based in Dallas, 7-Eleven operates, franchises and licenses more than 6,970 stores in the U.S. and Canada. As one of the leading national retail trade associations that focuses exclusively on state and federal tobacco legislative issues, NATO’s

Renewed Optimism for Smokeless tobacco and tobacco chewing products

The simple truth is that no one is certain what the Food and Drug Administration (FDA) will come up with next now that it has been given de facto control of the tobacco industry. But between bureaucratic control freaks, national, state and local taxes, and even the whispered fear of retailer liability concerns ahead, many

Marketing Cigars in Tough Times

Despite the SCHIP tobacco taxes that hit on April 1, 2009, cigar sales continue to persevere. The federal taxes on large cigars rose from 20.719% of the wholesale price with a tax cap of 4.875 cents per cigar to 52.75% of the wholesale price with a tax cap of 40.26 cents per cigar. The tax

Smokeless Stays Strong

With many states passing smoking bans, more customers are turning to smokeless tobacco, and the sales figures from 2009 bear that out. According to Information Resources Inc., for the 52 weeks ended Dec. 27, 2009 total dollar sales for other tobacco products was $6.07 billion, up 14.6% from last year. Unit sales totaled 2.40 billion,

RYO Rolls Into 2010

RYO Pounds Sold Per Year Roll your own (RYO) cigarettes is a growing trend. Sales have climbed during the past five years, yet took a dive in 2009 as customers started using pipe tobacco to roll cigarettes as a result of increased taxes. On the other hand, customers used 10.6 million pounds of pipe tobacco

New Cigarette Rules Proposed Today In New York

This afternoon, the state tax department of New York will issue regulations to collect taxes on cigarettes sold by Indian retailers, The Buffalo News reported. The new plan looks to collect the tax “upstream” rather than from Indian retail shops. Tobacco manufacturers will be required to sell cigarettes only to licensed stamping agents, certifying that

Cigarette Excise Tax, Ohio Cigarette Tax Changes Bring Higher Prices

An Ohio coalition refutes the findings of a recent report claiming that increasing Ohio’s cigarette tax by $1 per pack would bring the state $299.7 million per year. The report released yesterday, entitled, Tobacco Taxes: A Win-Win-Win for Cash-Strapped States is based on national and state surveys of registered voters. “Any economist will tell you

NATO Fights New York On Proposed Ban of Flavored Tobacco

This week, the National Association of Tobacco Outlets (NATO) sent a letter to all 213 members of the New York state legislature urging them to defer legislative action on Bill Number A.9482, which aims to prohibit the sale of all flavored tobacco products in the state except for products with a tobacco, menthol, mint or

Study Disputes Claims Made By E-Cigarette Manufacturers

A study at Virginia Commonwealth University found that electronic cigarettes, through which customers can inhale nicotine vapor instead of smoke do not deliver as promised, CNN reported.   “They are as effective at nicotine delivery as puffing on an unlit cigarette,” said Dr. Thomas Eissenberg, at the school’s Institute for Drug and Alcohol Studies. His

Kretek Drops Cigar Lawsuit Against FDA

Kretek International Inc., importer and marketer of Djarum clove cigars has withdrawn its lawsuit against the U.S. Food and Drug Administration (FDA), regarding the distribution and sale of clove cigar products. In light of statements made by the FDA, Kretek in September of 2009 filed a complaint in the U.S. District Court for the District

Opportunities Exist for Cigars

TOP PERFORMERS Altria Sales & Distribution (John Middleton) Swisher Swedish Match HONORABLE MENTIONS Altadis USA Republic Tobacco The SCHIP tobacco tax rates that hit in April 2009 are costing cigar smokers more, but sales continue to persevere. As of April, the federal taxes on large cigars rose from 20.719% of the wholesale price with a

FDA Looks at Future of Tobacco Products

Confusion Reigns Supreme C-store operators aren’t the only ones left scratching their heads by the Food and Drug Administration’s (FDA) first foray into tobacco regulation.During the FDA’s teleconference, Catherine Lorraine, a lawyer for the administration, said, “I just want to draw your attention to the portion of the definition of a cigarette, which specifically refers

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

Legislative Wrap Up for 2009

With the Democrats controlling both houses of Congress and the White House, this year has seen major federal tax and regulatory legislation signed into law that will dramatically impact the tobacco industry. On April 1, the largest tax increase on a single product in the history of the U.S. became law with the federal cigarette

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

Turning to the RYO Category

Since the onset of the April SCHIP tax increase, tobacco retailers have been turning to puffed or extended tobacco to help customers deal with the skyrocketing costs of cigarettes, especially as more customers are turning to the roll your own (RYO) category in an attempt to save dollars. Republic Tobacco’s Gambler is the market leader

FDA Clarifies Flavored Cigarette Ban

The FDA hosted a media briefing this morning and has posted documents on the FDA Web site issuing additional information regarding the ban on flavored cigarettes, authorized by the Family Smoking Prevention and Tobacco Control Act that was signed into law in June. According to the new documents, cigarettes containing an artificial or natural flavor

Roll-Your-Own Climbs Amid Tax Hit

Mounting cigarette costs are driving smokers to test cost-effective tobacco alternatives, such as roll your own (RYO). The 2009 NACS State of the Industry report, which polled 156 retail firms with 20,553 stores as of December 2008, found that pipe and cigarette tobacco sales had the strongest growth of all tobacco products and were up

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

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

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