Pricewatch: 17 May, 2019: Premium cigarettes
Find out how your store compares on the pricing of premium cigarettes
With the rise of dual cigarettes, and margins continuing to be squeezed, it’s no surprise some retailers are selling these products above the Booker RRP.
Sterling Dual Kingsize is being sold at an average of 20p above RRP, so there is a potential opportunity to increase the price of this product.
Because supermarkets can stay competitive by stocking premium cigarettes at low prices, retailers should focus on stocking a varied range and staying on top of trends to keep customers returning.
With Silk Cut Purple, retailers in the table are selling above RRP, with a 20p average increase. As stated in the price distribution table, 11% of retailers stock Silk Cut Purple at £11.85, which is lower than Booker’s RRP and the average retail price.
Retailers in rural areas are selling cigarettes lower than the Booker RRP, but are unlikely to have competition close by, so they have a key opportunity to raise their prices.
|PRODUCT||AVERAGE UK RETAIL PRICE*||BOOKER RRP||NEIGHBOURHOOD SHOP IN WARWICKSHIRE TOWN||NEIGHBOURHOOD SHOP IN EDINBURGH||C-STORE AND POST OFFICE IN SHEFFIELD SUBURB||NEWSAGENT IN KENT COMMUTER TOWN||C-STORE IN NORTH MANCHESTER SUBURB||VILLAGE STORE IN STAFFORDSHIRE||SAINSBURY’S||TESCO||ASDA|
|STERLING KINGSIZE DUAL 20||£9.99||£9.80||£10.00||£9.70||£9.79||£9.80||£10.20||£9.80||£9.59||£9.59||£9.59|
|L&B KINGSIZE ORIGINAL SILVER 20||£10.55||£10.35||£10.60||£10.35||£10.79||£10.30||£10.70||£10.35||£10.00||£10.00||£10.00|
|MARLBORO KINGSIZE GOLD 20||£11.61||£11.15||£11.45||£11.15||£11.39||£11.25||£12.30||£11.15||£11.05||£11.39||£11.40|
|MAYFAIR KINGSIZE 20||£10.33||£10.10||£10.40||£10.05||£10.49||£10.00||£10.75||£10.00||£9.95||£9.95||£9.95|
|B&H KINGSIZE GOLD 20||£12.11||£11.94||£12.00||£11.85||£11.99||£11.90||£12.35||£11.95||£12.45||£12.35||£12.20|
|SILK CUT KINGSIZE PURPLE 20||£12.10||£11.94||£12.00||£11.90||£11.99||£11.90||£12.40||£11.95||£12.45||£12.40||£12.40|
|B&H KINGSIZE SILVER 20||£11.20||£10.95||£11.10||£10.90||£10.99||£10.99||£11.20||£10.95||£10.74||£10.74||£10.75|
|STERLING KINGSIZE DOUBLE CAPSULE 20||£9.97||£9.80||–||£9.70||£9.79||£9.80||£10.20||£9.80||£9.59||£9.59||£9.59|
|RICHMOND SUPERKINGS GREEN 20||£10.58||£10.35||£10.60||£10.45||£10.49||£10.50||£10.70||£10.35||£10.10||£10.35||£10.35|
|RICHMOND KINGSIZE REAL BLUE 20||£10.55||£10.35||£10.60||£10.45||–||£10.60||£10.70||£10.35||£10.10||£10.35||£10.35|
|MAYFAIR KINGSIZE SKY BLUE 20||£10.35||£10.10||£10.40||£10.05||£10.49||£10.10||–||£10.00||£9.95||£9.95||£9.95|
|RICHMOND SUPERKINGS REAL BLUE 20||£10.55||£10.35||£10.60||£10.45||£10.49||£10.49||£10.70||£10.35||£10.10||£10.35||£10.35|
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Location: Fixby, Huddersfield
Size: 1,800sq ft
Ask your customers what products they want you to stock
We always sell our premium cigarettes above RRP, with an average increase of £1. The most popular products we stock are Silk Cut, B&H Gold, Regal and Embassy. In recent years, we have decreased the amount of space given to cigarettes because of the increase in vaping. However, our cigarettes sales stay stable throughout the year and, although trends are changing, I’ve found customers know what they want. I always speak to my customers about the products they want to keep those customers returning.
Location: Moira, Northern Ireland
Size: 2,000sq ft
Experiment with new products to increase sales
Unfortunately, premium cigarettes have declined significantly since the introduction of cheaper varieties. We still stock brands such as Silk Cut and Benson & Hedges, but customers tend to know what they want, or ask for the cheapest brands. Premium brands were once very popular and our profit margins were good, but we find customers who try new products – such as e-cigarettes – often revert to cheap cigarettes. We always try to stock new products and although they are popular at first, they can lose popularity just as quickly.
Pasture Lane Stores
Location: Sutton Bonington, Nottinghamshire
Size: 1,000sq ft
Stick to main brands and sell at RRP if you can
We always price our premium cigarettes at RRP. Customers are more aware of cigarette prices than they were 10 years ago, so we have to remain competitive because they will go elsewhere. Duals have become more popular over the past few years because they have a steady price that customers don’t find too expensive. Customers will buy brands they’ve used for years, and well-established brands – such as Marlboro Gold – sell well. Customers tend to buy trusted brands, but do often ask for the cheapest alternatives.
Location: Newburgh, Aberdeenshire
Size: 1,200sq ft
Stock cigarettes at premium prices to maximise margin
I stock all my products at a premium price and aim for an 8% minimum margin. Premium cigarettes aren’t popular in my store and I sell 10 packets a week at most. Although there has been a market-wide increase in dual cigarettes, I only stock a couple of brands because my customers tend to know what they want and will rarely change. Over the past five or so years, my stock has stayed the same, as that’s what my customers want. Overall, customers want cheaper brands and are buying and smoking less.
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