SPRING’S flurry of tobacco regulations – from plain packaging to minimum pack sizes – appear to be hitting revenues at stores across Scotland, but what can be done to shore up sales?
Not much, according to Chris Cobb at Cults Stores Keystore in Aberdeen, who reckons the implementation of TPD2 in May has created a dip in his tobacco sales.
Cobb, a previous winner of the Scottish Grocer Tobacco Retailer of the Year Award, admits that retailers have their hands somewhat tied by tight regulations, although he has responded to the changes with a price cut that appears to be mitigating the damage.
“We have seen sales obviously go down,” he said.
“We’ve tried to combat that by going down to RRP. We used to be plus 12% but we’ve seen a change in prices at the local Sainsbury’s and Tesco, they’ve gone down to RRP. I think going down to RRP is helping.”
It’s not just Chris who thinks going down to RRP may be wise. The retailer noted that Imperial Tobacco is running a “massive incentive” for retailers who go down to RRP – with a bonus that Chris reckons seriously encourages retailers to make the change.
One factor driving a race down to RRP could be the introduction of plain packaging, as Chris reckons customers’ perception of value may have altered in recent years, with the disappearance of PMPs confusing things further for shoppers.
The tight regulations also make it difficult to stock NPD, according to Chris, as there’s not much he thinks can be done beyond staff suggestion, and the retailer reckons his customers are fairly brand loyal when it comes tobacco.
“If it’s a product that I know I could sell I’d get it in, but mainly I’m a bit more sceptical about buying new things.
“Tobacco reps are usually quite good and are happy to swap stock that doesn’t work, but it’s very difficult to promote to customers now. The market has changed.”