Tobacco Product Dollar Sales See Boost

cigarettesCigarette volume sales on the decline.

Wells Fargo Securities has outlined cigarette, smokeless and electronic cigarette dollar sales numbers for the four-week period ending Nov. 5, 2016.

Cigarette dollar sales continue to be driven by solid pricing, while volume sees historic declines.

Wells Fargo reported that cigarette dollar sales increased 1.3% during the recent four-week period ending Nov. 5, 2016, (+0.9% for 12-weeks; +1.8% for 52-weeks), on solid +3.1% pricing and decelerating volume -1.8% (vs -2.5% equal unit volume for 12-weeks).

Cigarette volumes have declined 3-4%, which Wells Fargo noted has been expected.

“We estimate total cigarette industry volumes will decline around -2.0% in FY16 and decelerate further in FY17, down -3.0%,” noted Bonnie Herzog, senior analyst for Wells Fargo.

Meanwhile, smokeless tobacco dollar sales continue to grow with help from brand expansions.

Wells Fargo reported that smokeless tobacco dollar sales grew 5.4% this period (vs. +4.7% 12-weeks), reflecting strong consumer acceptance of recent line extensions, but also limited “uptrading” into combustible cigarettes.

Electronic cigarettes saw dollar sales up 25.3% led by VUSE & MarkTen XL.

“In a post-deeming regs environment, we expect competition to intensify. VUSE’s ability to maintain strong volume/pricing (+9.3%/+15.2%) is a testament we believe to its strong competitive positioning. We expect further gains as new VUSE formats (VUSE Vibe and later VUSE Port and VUSE Pro) start to hit store shelves,” Herzog said.



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