Navarra Retail Systems sales director Hugh Walker has criticised the margins and gantry contracts given to retailers by tobacco manufacturers.
In a blog post on LinkedIn, Walker said that manufacturer advice to stick at RRP showed that they had "moved away from the interests of the retailer in this low-margin market".
He said that cigarette sales declines of 12-20% are being offset by retailers moving away from RRP to increase margins.
The head of new business also claimed many gantries provided by tobacco manufacturers are now 30% empty due to the end of 10 packs, but retailers are being contractually prevented from switching gantry.
“At a time when they want to modernise their shop, improve and increase their stores profitability they are held to use a fixture they don’t really want, takes up too much space and offers no help in the EUTPD period,” he said.
Navarra Retail Systems sell EPoS-controlled ‘smart gantry’ systems.
The issue of RRP splits shop owners, with research by Retail Express last May showing half of independent shops are selling at above RRP, with an average of 17.5p above on a 20 pack of cigarettes.
Read more: Multiples undercutting independents with below RRP tobacco sales
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