Bestway Wholesale has produced a guide for retailers advising customers on how they can protect their tobacco business following the introduction of EU legislation on tobacco products.
Many tobacco suppliers are currently reducing -or stopping- their supply of price-marked packs into the trade which could create confusion on retailers’ pricing strategies. In addition many pack formats will disappear from shelves over the next year as minimum pack sizes come into play; cigarettes will no longer be available in packs of less that 20 while RYO will have a minimum pack size of 30g.
The company is convinced the best way for retailers to protect their tobacco business is to preserve current manufacturers’ recommended retail prices to maintain the confidence of smokers.
Tony Holmes, sales director, retail at Bestway Wholesale, comments: “Smokers are an important customer group for convenience store operators. They visit stores more frequently and spend more than double that of non-smokers. It is imperative that following the removal of price-marking, retailers take the necessary steps to protect their tobacco sales.”
Holmes also argues that research from Australia states that those retailers who stayed true to the recommended price of tobacco saw no discernable impact on their tobacco sales. He also suggests that other categories will be affected saying “If retailers choose to inflate prices to earn additional margin, they will see a decline not only in their tobacco business, but also across other grocery and impulse categories as footfall will diminish due to smokers going elsewhere to get greater value. Many retailers use several wholesalers to make sure they get the best prices – why do they think smokers would behave any differently if they increase the cost of tobacco? In order to retain customers and footfall, we are therefore advising all customers to maintain current pricing at RRP and Bestway and Batleys depots will be offering ten packs and PMPs for as long as they are available from manufacturers to help retailers meet the needs of their customers.”
The eight page leaflet – entitled Don’t let your tobacco sales go up in smoke! – is available from all Bestway and Batleys depots from this week (June 16).
Best-one and Xtra Local business development executives will also be distributing the brochure to symbol and club members.