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With supermarkets around our Sheffield stores shuttering their cigarette gantries ahead of the display ban deadline on 6th April, we have noticed a significant increase in sales. Booker, our main supplier, has advised for sometime that there is a £1 billion sales opportunity for small stores who do will not need to go dark until 2015.
From the evidence of the last couple of weeks this maybe an underestimate. Our tobacco sales are already up by nearly 30%! However there are serious challenges that need to be managed if we are going to make the most of the opportunity.
The first is keeping stock in our stores.
This is a new situation, and EPoS data is just not giving us a good enough indication of stock requirements. My family has four stores trading under the Singh’s Premier fascia and during the last couple of weeks our daily cigarette and tobacco delivery has provided insufficient as sales have rocketed, meaning we have needed to collect extra stock from the depot. Handling high value stock like cigarettes comes with risks, which we are endeavoring to understand and minimise.
Taking a lesson from the cash handling security industry, our driver parks outside each store where the delivery is needed. Then two members of staff collect the stock while the driver stays inside the locked car.
The second issue is ensuring that customers get a speedy service. We are seeing an uplift in customers because supermarkets are finding the shuttered cigarette gantry hard to manage. A nearby Tesco Extra has had to double staffing on their tobacco kiosk and there are still queues as staff struggle to serve from the dark display. To ensure that we get it right and keep these customers coming to us we have doubled our counter staff and started opening earlier.
What we have also found interesting is where the sales increases have been. In our stores the brands with the biggest increases include Red Band, Sterling and Windsor Blue, all of which are price marked. The surprise is B&H 20 that we sell at the recently increased price of £7.57. Looking deeper at this unexpected seller, I think that it is down to the fact that supermarket multi-packs are never price marked.
To summarise, to maximise this opportunity small stores must:
Review stock holding
Act quickly to restock when you running low
Be aware that EPoS sales data may not be a good guide to potential sales
Increase till staff to minimise queues
Be aware of additional security risk involved with increased stock and collections from the depot
Improve your contacts with the tobacco companies. If you see their rep once a month get his mobile number and phone him/her each week for updates.
This is a fantastic opportunity for independents, but we will all have to up our game to make the most of it.
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