Predictably, COVID caused an abrupt change in consumers’ buying behaviors, including fuel and toilet paper. It also caused significant supply chain disruptions that impacted every retailer’s ability to keep new fast-moving items in stock. But surprisingly, it also reversed the long decline in cigarette sales both in the US and Canada.
Since approximately 87% of cigarette sales scan out at c-stores, these tobacco retailers had to meet increased demand while adjusting to a disrupted supply chain, leaving many out of stocks in this category. The following discusses the past and current cigarette sales trends and how scan data can help the industry to meet consumer demand.
The 2020 cigarette sales trend reversal
In the US, the FTC reported a slight increase of 202.9 billion units in 2019 to 203.7 billion units in 2020 after years of decline, approximately 0.4%. In Canada, unit sales increased from 18.6 billion units in 2019 to 19.1 billion units in 2020, a 2.6% increase. Some have suggested COVID restrictions also decreased illegal cigarette sales, which may explain the difference.
Will this trend reverse itself in 2021?
So far, both in the US and Canada, 2021 is showing a reversal. Altria reports an industry-wide decrease of 4% for the first half of 2021. Statistics Canada reports, for the first 9 months of 2021, a reduction of 12.5% versus 2020.
Why Should C-Stores and Other Tobacco Retailers Care?
Industry statistics can help you keep track of trends at a higher or macro level. It helps you understand, in retrospect, what you had no control over and where you might have missed opportunities and where you may have left yourself vulnerable to risk. The keyword is “retrospect.” The ability to change the course of a business is found in its day-to-day operations and that’s where back-office and scan data can help the tobacco retailer.
How does back-office and scan data help you, suppliers and manufacturers?
Back-office and scan data apps help you, the manufacturer and the supplier, understand trends in this category in much shorter intervals. What once took months can now be reported on and reacted to weekly across the supply chain. It helps to adjust ordering, manufacturing, and distribution decisions far before industry reports are published.
Our integration with Altria also allows you to set up error-free promotions easily. With Scan Data by Petrosoft:
- Collect thousands of dollars in tobacco rebates (buydowns) each month with minimal effort
- Get up and running quickly
- Easily integrate Scan Data with your existing POS, with plug-and-play integration with all major c-store POS systems
- Altria API promotions integration included for error-free price promotion (buydown) setup
References:
https://www.cspdailynews.com/csp-magazine/whos-challenging-c-stores-share-tobacco-market
https://www.ftc.gov/reports/federal-trade-commission-cigarette-report-2020-smokeless-tobacco-report-2020
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1610004401
https://investor.altria.com/events-presentations/default.aspx
