Pricewatch: 17 August, 2018: Budget cigarettes

Analysis

Despite manufacturers’ efforts to persuade independent retailers to stick to RRPs, the trend is to price budget cigarettes above RRP.

Our Profit Checker graph shows 58% charge above Booker’s £8.10 for Carlton Superkings Red, with £8.20 and £8.30 the next favoured prices. The average selling price for all 12 products featured on our Price Checker graph is above RRP and just six of the 72 price points fall below.

That said, the Cornish shop on the table shows how some stores are bucking this trend – all its budget cigarettes are in line with Booker’s RRP, and 31.5% of stores chose RRP for Carlton Superkings Red.

Profit checker

PRICE Price distribution %

Price checker

BUDGET CIGARETTES AVERAGE UK RETAIL PRICE BOOKER RRP VILLAGE SHOP IN SOUTH YORKSHIRE SMALL HIGH STREET C STORE IN WARWICKSHIRE VILLAGE OFF LICENCE NORTHAMPTONSHIRE VILLAGE STORE IN SMALL SOUTH WALES TOWN NEWSAGENT IN CENTRE OF SUSSEX COASTAL TOWN SHOP IN CORNISH TOWN
STERLING KINGSIZE DUAL £9.29 £9.10 £9.10 £9.05 £9.05 £9.30 £9.30 £9.10
PLAYERS SUPERKINGS REAL RED £8.11 £8.00 £8.05 £8.00 £8.05 £8.30 £8.30 £8.00
PLAYERS KINGSIZE REAL RED £8.11 £8.00 £8.05 £8.00 £8.05 £8.30 £8.30 £8.00
B&H KINGSIZE BLUE £8.23 £8.00 £8.05 £7.95 £8.05 £8.30 £8.30 £8.00
L&B KINGSIZE ORIGINAL SILVER £9.84 £9.65 £9.70 £9.65 £9.75 £9.95 £9.90 £9.65
L&B KINGSIZE REAL BLUE £8.21 £8.00 £8.05 £8.00 £8.04 £8.49 £8.30 £8.00
CARLTON SUPERKINGS RED £8.24 £8.10 £8.15 £8.10 £8.15 £8.40 £8.40 £8.10
JPS KINGSIZE REAL BLUE £8.81 £8.65 £8.70 £8.65 £8.70 £8.95 £8.90 £8.65
CARLTON KINGSIZE RED £8.24 £8.10 £8.15 £8.10 £8.15 £8.40 £8.40 £8.10
PLAYERS CRUSHBALL £8.16 £8.00 £8.05 £8.00 £8.05 £8.30 £8.30 £8.00
MAYFAIR KINGSIZE £9.91 £9.75 £9.70 £9.75 £9.70 £9.30 £9.95 £9.75
SOVEREIGN KINGSIZE BLUE £8.25 £8.09 £8.05 £8.10 £8.05 £8.30 £8.30 £8.09
Data supplied by
Data supplied by

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How we drive our profit

Anita Nye Avatar

Anita Nye

Premier Eldred Drive Stores

Location: Orpington

Size: 1,200sq ft

Type: suburban area

Top Tip
Keep cheaper options available as cigarettes are a popular product across all price points
We get our budget cigarettes from Booker and stick to the RRP, which results in average margins of 5%. Our most popular products include those from brands such as Benson & Hedges Blue. Budget cigarettes are important because, since the EUTPD II and plain packaging came in, customers aren’t so bothered about branding and some just ask what our cheapest cigarettes are. We increase the likelihood of a sale during peak times by stocking tobacco upside down. Staff can easily see which brand it is and customers won’t be waiting as long.
Bimal Patel Avatar

Bimal Patel

Londis Ferme Park Road

Location: London

Size: 2,800sq ft

Type: city store

Top Tip
Be reasonable with the pricing and make sure you always have good availability of your products
The price we charge on budget cigarettes tends to be 5p above the Booker RRP and some of our most popular products are from the Benson & Hedges Blue range. Sometimes we might even go as high as 8p above RRP, but you have to be reasonable. Customers don’t mind paying a bit extra for cigarettes, but you can’t really go too over the top with your pricing. There’s already an expectation on the price of cigarettes and customers will go elsewhere for them if they find out you’re charging much more than your nearest competitor.
Anish Parekh Avatar

Anish Parekh

Londis Broadoak & Post Office

Location: Ashton-under-Lyne

Size: 1,000sq ft

Type: neighbourhood shop

Top Tip
Customers are often looking to buy the cheapest products quickly, so know your range and layout well
I tend to add a couple of pence on top of the Booker RRP and one of the most popular brands among my customers is Carlton. Since legislation on plain packaging and closed tobacco gantries came in, customers aren’t really bothered about the branding on cigarettes now. They’ll normally ask us what the cheapest pack is. We’ll also run deals on cigarettes when we can. For example, we had a deal on packs of Carlton for £7.94 which lasted for seven weeks. This helped because our sales increased as a result.
Lifestyle Express Seaforth Road Avatar

Lifestyle Express Seaforth Road

Falkirk

Location: Falkirk

Size: 1,500sq ft

Type: estate

Top Tip
If you are part of a fascia or buying group, ask about any new budget lines and if they have an own-brand you can stock
Old-school budget brands such as Players Superkings Red cigarettes always sell well – the name has strong recognition among customers. We’ve also embraced own-brand value cigarettes as people increasingly notice price rises and want good value. Our buying group is Landmark – I operate the store under its Lifestyle Express fascia. We’ve only been with them since the start of the year, but I’ve been pleased with our sales of their own-brand value cigarettes, which are called No3. We sell them at £7.90 for a 20-pack and they are among our bestsellers.

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