SLR p53-54 Tobacco Jun09.qxp 29/05/2009 17:01 Page 54
tobacco
from supermarkets where customers remarkable rate with value and communications in the UK, says: “With
know they can get a wide range of economy cigarette lines gaining market adult smokers looking for greater value
items, or to the black market where share alongside a booming RYO for their money, Sterling provides
smugglers will sell you tobacco if you’re market.” quality at an even more affordable price
70 or seven.” The retail turnover generated by for consumers and a footfall driver for
It has to be remembered that around Scottish cigarette sales was £1.19bn in retailers. JTI is committed to
one in every three Scottish adults the last 12 months, up 1.1% compared supporting the trade, and the innovative
smokes, and that means it’s a big to the year before. move to make the Sterling price
earner for retailers. Scottish cigarette Lambert & Butler King Size permanently in the Super Value
volumes were down around 2.5% over continues to hold the number one spot cigarette sector will ensure that retailers
the last year. However, the value of as Scotland’s best selling cigarette and can continue to sell a leading brand like
these sales has risen by 1.1% during the Scotland’s biggest FMCG brand across Sterling, without the need to add new
same period. all categories. Regal King Size is products or extra facings to their
On a positive note, roll your own Scotland’s best selling premium gantry.”
(RYO) tobacco sales in Scotland have cigarette brand. Offering significant Among the company’s other activity
increased by 16%, continuing the trend retail margins, renowned brands such this year was a change of packaging for
observed in the previous years. The as Regal and Marlboro remain vital its Benson & Hedges brand, while more
preference of Scottish adult smokers elements of a Scottish store’s retail mix. recently a range of five limited edition
for RYO is set to continue especially in Imperial Tobacco says it is constantly designs for its premium lower tar
the harsh economic climate predicted analysing the market to ensure its brand, Silk Cut. The designs revolved
for 2009/2010. portfolio reflects the preferences of around the ‘Cut’ theme and feature five
Iain Watkins, Imperial Tobacco’s those 13 million UK adults who choose variations including; Diamond Cut,
trade communications manager to smoke tobacco. Most recently this Power Cut, Short Cut, Precision Cut
comments: “Scottish adult smokers and has been seen with the launch of the and Director’s Cut and are available
retailers have demonstrated a new JPS ‘Silver’ range. across Silk Cut Purple 10s and 20s,
remarkable resilience over the past few “Imperial Tobacco has always Blue 20s, and Silver 10s and 20s.
years. The category is evolving at a carefully monitored the market place to As one of the two biggest tobacco
ensure our brands meet the ever- firms in the UK, JTI knows a thing or
evolving preferences of Scottish adult two about how to maximise sales in the
smokers. This resulted in the launch of fixture, and it has the following advice
our new economy JPS ‘Silver’ range in for retailers:
November 2008. The brand, offering lEnsure the top selling brands are
heritage, quality and value has been well stocked and that you provide
extremely well received in Scotland enough space for them on the
especially in the current economic tobacco gantry
climate and it has grown its share very lAvoid out of stocks – research shows
quickly,” says Watkins. that customers will go elsewhere if
In terms of category management, their brand of choice is not available
Imperial Tobacco points out that with lKeep to your planograms – these
an average independent store turning have been created according to the
over £300,000 and tobacco sales best selling brands in your region
accounting for between a quarter and lRotate stock regularly so older stock
third of sales or £72,000, it is well is sold first. Sell through existing
worth looking at the fact that the stock with the current textual health
average independent store’s tobacco out warnings on the back of packs before
of stock rate is now 5.8%, meaning that placing new PHW packs on shelf
costs the store around £2,400 turnover lCheck the planogram once a month
per year or the equivalent of closing the to make sure that the product layout
store for three days. is correct
Iain Watkins comments, “Recent lDo not stack products on top of each
figures gathered by our field sales force other because this looks untidy and
show that the average out of stock rate causes damage to packs
in independent retailers now stands at lKeep the gantry clean and free of
5.8% considerably higher than other rubbish at all times
trade channels. An average store will lRe-fill and tidy the gantry every
suffer a loss of turnover equivalent to 3 morning, leaving no gaps in the shelf
days trade per year due to tobacco out of lKeep well stocked with associated
stocks alone.” products such as lighters to give
Over at JTI, Sterling has been a yourself the chance to up-sell to
strong player and recently moved into customers purchasing tobacco
the top slot in the ‘super value’ category. lKeep updated with regulatory and
At the last count it had an impressive legislative changes to the market. JTI
52.1% share of that sector, while attends trade shows and events and is
Sterling’s overall total share of the UK committed to supplying the trade
cigarette market now stands at 6.1%. with regular updates, from sales
Jeremy Blackburn, JTI head of representatives or the trade press.
54 l SCOTTISH LOCAL RETAILER l JUNE 2009 WWW.55NORTH.COM
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