By combining the FTC data with data from other trusted industry sources, we’re able to answer that question.
Here are a few stats to get us started. The FTC reported the following totals for “Price Discounts -Retailers”:
- 2016 — $5,806,108,000 or 67% of cigarette manufacturer promotional and advertising spending
- 2017 — $6,188,802,000 or 72% “”
- 2018 — $6,154,985,000 or 73% “”
- 2019 — $5,695,845,000 or 75% “”
- 2020 — $6,065,320,000 or 77% “”
What Falls Under Price Discounts?
The FTC defines these as:
“Price discounts paid to cigarette retailers in order to reduce the price of cigarettes to consumers, including off-invoice discounts, buy-downs, voluntary price reductions, and trade programs; but excluded retail-value-added expenditures for promotions involving free cigarettes and expenditures involving coupons.”
“Retail-value-added expenditures for promotions involving free cigarettes (e.g. buy two packs, get one free), whether or not the free cigarettes are physically bundled together with the purchased cigarettes, including all expenditure and costs association with the value-added to the purchase of cigarettes (e.g., excise taxes paid for the free cigarettes and increased costs under the Master Settlement Agreement).”
More Stats to Help Build Our Estimate
- C-stores have nearly 87% volume share of all tobacco sales, according to Nielsen*
- The U.S. has 150,274 convenience stores as of December 31, 2020, according to NACS*
- There are 380,000 U.S. tobacco retailers in the U.S., according to the CDC*
With a simple multiplication of price discounts X 87% / 150,274, we arrive at $35,114.71 per location per year for cigarettes only.
You can then add in other tobacco product rebates for a larger estimate. That report is also available on the FTC website*. You can also conservatively estimate price discounts / 380K retailers for $15,961.37 per retail location per year.
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