How profitable is the area of your store taken up by your tobacco unit?
What is the value of basket items purchased by adult smokers along with their chosen tobacco product in your store?
Take a moment to add it up, the answer may surprise you!
The UK tobacco category continues to be an essential part of the retail mix, accounting for around a third of turnover in convenience stores and a fifth of profit. Tobacco is a significant footfall driver, as adult smokers visit retailers’ stores more frequently than non smokers and spend more whilst they are there. Tobacco is also a huge catalyst for impulse purchases from categories such as confectionery, snacks and soft drinks.
What’s the value of a tobacco shopper to my business?
Tobacco shoppers spend twice as much as the average convenience store shopper per year.
Out of Stock – Out of Pocket
Independent research consistently reports that availability is the number one shopper need.
52% of shoppers will leave a store without making a purchase if their preferred brand is unavailable.
Source: AMR 2011/HIM! CTP/ITUK Estimates
Price marked packs work!
Price marked packs can be a powerful marketing tool for your business. They inform and reassure shoppers that your business offers value for money – a key shopper need.
80% of tobacco retailers now stock price marked packs
2/3 of tobacco sales are now in price marked packs
60% of tobacco shoppers are most likely to buy cigarettes from a store carrying price marked packs
27% of smokers would choose to visit a shop more frequently if it offered more PMP products.
Tobacco drives turnover and basket spend
Tobacco accounts for 24% of a typical symbol store’s turnover, equivalent to £176K annually.
68% of tobacco purchases include additional basket spend.
Adult smokers buy a wide range of products when purchasing their tobacco:
Source: ITUK visits data 2011; ITUK Sales data (independents); HIM! CTP2011