Cigars aim for stability in 2022

Cigar sales have shown moderate growth in 2021, and convenience store tobacco category managers are waiting for inventory reliability.

Now that cigar supply chain issues have begun to find more stable ground since the early days of the pandemic, convenience store tobacco category managers are wondering if greater inventory reliability will boost sales.

Convenience store data from IRI shows dollar cigar sales rose moderately, at 3.3% for the 52 weeks ending December 26, 2021. However, a year ago changes in unit sales fell by more than 3%,effectively support the increase in sales.

Nielsen reported similar dollar sales for cigars across all retail channels, including convenience stores, at 2.1% for the 52 weeks ending Jan. 29. In terms of unit sales, Nielsen’s conclusions were a little more encouraging, with a positive result of 0.7%. It also revealed a 1.3% price increase for this year-over-year comparison.

Of course, in-store experiences don’t always reflect national trends.

At The Cigarette Store (TCS), cigar sales have been on an upward trajectory for some time. TCS is Smoker Friendly International’s largest licensee and operates more than 180 stores, including Gasamat convenience stores as well as tobacco outlets and cigar lounges in eight states.

“We are still encountering supply problems; however, over the past few months it has improved a lot. Over the past six months, we’ve seen a 5.6% increase over the same period a year ago,” said Jeremy Weiner, Category Manager, Premium Cigars and Products, Smoker Friendly.

He is also optimistic about the planned varieties that should be released.

“A few of the cigar makers are planning to release limited release items this year,” Weiner said.

Regulatory concerns

However, news from the Food and Drug Administration (FDA) plans to begin the process of a proposed tobacco product standard rule to remove the authorization to sell and market flavored cigars. The action could start as early as next month.

Convenience stores in some states have been fighting these kinds of bans on vapers and e-cigarettes for years, but more recently the focus has shifted to flavored cigars and cigarillos, which also continue to face tax increases.

For example, in New York State, cigars were subject to an excise tax of 75% of the wholesale value, prepaid a few years ago. Last July, California increased its cigar tax by 11.5%, reaching almost 64%, which is expected to last until the end of June.

“Who knows what else they’ll throw at us,” said Jim Calvin, president of the New York Association of Convenience Stores. “(I’m watching) another attempt to ban all flavored tobacco statewide, another attempt to ban flavored alternative nicotine products statewide.”

About Margaret Shaw

Check Also

BACK TO SCHOOL: Using e-cigarettes at school can help discipline

The impact of e-cigarettes on our schools In recent months, great steps have been taken …