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With stable sales of traditional tobacco and more stores benefitting from next-generation products, 2019 looks set to be a positive year for these core categories. Priyanka Jethwa reports
Despite major legislative changes in the tobacco market in the past 18 months, the latest data shows that there has been no significant impact on tobacco sales in the UK.
Tobacco continues to be the biggest convenience category, with the total UK tobacco market currently worth £14.4bn.
“The total value of the independent and symbol tobacco market totalled £6.2bn in the past year, with the cigarette market accounting for £5bn,” says Ross Hennessy, head of sales at JTI.
This means there is huge potential for retailers to tap into this market and really push sales this year by learning how to best manage a profitable range.
Two of the biggest areas of growth within tobacco are cigars and accessories – with the latter growing 7% year on year. If these areas are invested in properly, it can help shape a profitable range.
Meanwhile, when it comes to next-generation products – a category predicted to be worth £2.5bn by 2025 according to British American Tobacco – retailers should be stocking a range of open and closed systems for those searching for vaping products and accessories.
What’s the best way to manage a tobacco range in 2019?
One way to manage a profitable tobacco range in 2019 is by concentrating on core range and ensuring good availability of products and accessories.
Andrew Miller, head of field sales at Imperial Tobacco, says within the roll-your-own category, smokers tend to prefer all-in-one products that combine papers, filters and tobacco together, and retailers should stock products that offer this.
“Our Gold Leaf 30g handy pack has proved extremely popular in this regard,” he adds.
Cigars are also another example where great category management can maintain sales and even lead to growth.
When it comes to assembling a core range in the cigar category, for example, it is important retailers tailor their offer to store type and demographic.
Depending on this, Jens Christiansen, head of marketing and public affairs at Scandinavian Tobacco Group, says retailers should ensure they stock a basic cigar range, covering the miniatures, panatellas, premium and value-for-money segments.
“We recommend retailers stock Signature Original and Signature Blue (previously Café Crème), Moments Blue for miniatures, and Hamlet 5s and Moments Panatella to cover off the panatella and small cigars segment,” he says.
Aside from making sure retailers are stocking the right brands in each section, it’s a good idea to stock a range of tobacco accessories, with the category worth more than £274m.
Of this, papers are worth £95.5m, according to Republic Technologies, growing at 8.1%, while filters are worth £82.5m, growing at 8.5%.
General sales manager Gavin Anderson says retailers should invest in a selection of accessories, including filters, papers, matches and lighters, as well as the latest products in the market.
“Pack formats also play an important role. Space-saving packs such as vertical Zig-Zag King Size papers (50% space-saving compared with traditional King Size packs) and our Poppell 45-pack lighters help retailers to manage shelf space more effectively, while formats such as Swan Slim Pop- a-Tip Filters offer a convenient alternative (versus Swan Slim Loose Filters) for on-the-go shoppers,” he adds.
Anderson is keen to point out retailers can also take advantage of accessory sales by using a display stand and off-gantry fixtures to signpost the tobacco category and drive impulse sales.
To combat discounters, he says retailers should invest in unbleached and flavoured papers in multipacks.
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What’s the best way to manage your next-generation range in 2019?
Many industry figures agree the vaping market is now at a point of saturation, with a dizzying number of different devices and liquids for sale.
Shoppers looking to vape can be intimidated by the number of products available to them, so they often rely on the knowledge of store staff to guide them in the right direction.
By taking the time to expand customers’ understanding of the category, retailers can effectively advise customers and grow their sales as a result.
Chris Street, head of trade marketing at Blu, says to effectively manage a next-generation range, retailers should stock at least one open system and one closed system from a well-known brand such as Blu, but also consider stocking new products like Myblu and Blu ACE to tap into the latest category trends.
Street also adds retailers shouldn’t forget about accessories such as clearomisers, as they can be a great way to upsell and drive additional sales and margin. “Ideally, they should be changed after every two bottles of e-liquid, or every time a flavour or brand is switched, to provide the optimum vaping experience.”
Like traditional tobacco, availability is also key for next-generation products. Street says if products aren’t available, shoppers will turn to other stores. “Regularly check stock levels to ensure you don’t run out, and be prepared for seasonal vape spikes around Stoptober, New Year and VApril.”
But moreover, one of the big advantages of the next-generation category is that it isn’t restricted by the same regulation as traditional tobacco. This means you can display, advertise and promote vaping products in store.
Therefore, Street says countertop units, back wall displays and PoS located in and around the store can be a great way to drive visibility. “Blu has a great range of PoS to help drive sales in-store; we’re always happy to work with retailers to optimise the way they communicate their vape offerings,” he adds.