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Dec./Jan 2001/2002 |
The year 2000 may seem a world away, but the results of our annual retailing survey tell a happy tale of a boom-gone-bust that has bottomed out. Among the respondents in our annual retailing survey, 56% reported an increase in sales last year (compared to only 32% a year earlier), and only 44% reported a drop in sales, compared to 62% in 1999. Respondents reported an aggregate increase in sales of 1.4% over last year's sample - a small but positive shift.
Premium cigars accounted for 39.7% of all merchandise sold, edging up slightly from 38% last year and reversing three straight years of shrinking share in our annual surveys. Non-premium cigars, as a percentage of total store sales, jumped from 3.5% in 1999 to to 5.1% last year, a figure that may reflect growing consumer interest in small cigars and cigarillos, and - no doubt - drastically discounted premium closeouts that some shops no longer considered premium products at the cash register.
In boxed cigars, 68% of all sales were under $100, with 26% falling between $75 and $99, and 22% falling between $40 and $74.99.
Following a large leap in 1999 (27.6% of total store sales among last year's survey respondents), cigarette sales settled back at levels much closer to 1998 - 17.9% in 2000. About one of every four cigarettes sold were domestic brands (13.4% of total store sales), the balance imported specialty labels (4.6% of sales).
 Continued...
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Despite the turmoil in the cigar marketplace last year, tobacco merchandise reasserted itself in store sales, accounting for an average 91% of all sales, up from 86% in 1999. Non-tobacco merchandise only accounted for 9.4% of sales last year, down from 14.4% of total store sales in 1999 and 11.9% in 1998. Considering the intense shifts in cigar price points, discounted and discontinued merchandise, and a general glut of inventory, tobacco's greater share of store sales may come as a surprise. Reliance on gifts and unrelated, non-tobacco products among our sample actually fell last year, an indication that for many traditional smoke shops, core tobacco products and related supplies and accessories were not loosing ground to other "survival" merchandise categories.
Price points of premium cigars remained notably stable among our sample, with only minute shifts revealed. Single stick sales were again dominated by the $4.50 to $6.99 range, which accounted for 35% of sales, followed by those in the $1 to $4.49 category at 32% of all single stick sales, then $7 to $9.99 (20%).
Sales of smokeless tobacco among our respondents made its largest jump in recent years, accounting for 1.3% of total store sales in 2000 compared to .8% in 1999. This was the largest share of store sales for smokeless products in five years. Has the long erosion reversed course for this predominately mass-retail outlet product?