A Newcastle shopkeeper says tobacco offers miniscule profits, as a
parliamentary report reveals it's a myth that tobacco sales prop up
small shops
File
photo dated 18/06/07 of a pack of cigarettes as nearly one in five
shops illegally sold cigarettes to children in an investigation. PRESS
ASSOCIATION Photo. Issue date: Friday August 7, 2015. Teenagers
supervised by trading standards officers attempted to buy cigarettes in
352 test purchases in England. Sixty-three illegal sales were made -
17.9% of the total. See PA story POLITICS Cigarettes. Photo credit
should read: Martin Rickett/PA Wire
Tobacco sales are not vital to keeping small corner shops afloat, and might actually be harming their profit margins, researchers claim.
A report being presented to parliament today says small shop owners make only small profits from tobacco sales, and many feel they have too much cash tied up in the expensive products.
Newcastle shopkeeper John McClurey joined anti-smoking campaigners in Parliament at today’s launch.
John said he hoped to demolish the myth that cigarette sales are vital to keeping small local businesses afloat.
He said: “I have little choice other than to sell tobacco as many of my customers still smoke.
“But tobacco makes me very little money while tying up plenty of cash in stock. Tobacco is a burden to me, to say nothing of the ill health it imposes on my customers.”
John says he, and many others who run newsagents, would rather put their money into products which turn a high profit.
He said: “I make about 36p on a packet of 20 cigarettes compared to 20p on a pack of chewing gum or 57p on a Sunday newspaper.
“Times are changing and we are seeing fewer and fewer people smoking. Cigarettes have disappeared behind gantry doors, and we are shifting to ‘plain’, standardised packaging.
“The tobacco manufacturers now need us more than we need them. They work hard to keep large tobacco stocks in shops, but it seems outdated now that we still give up so much prominent space at the till to these products.
“The alternative is to reduce stock, shift the cigarette gantry well out of the way and free up space for products that actually turn a decent profit.
“As retailers, we can keep our customers who smoke, improve our profitability and make tobacco truly invisible to the many young people who come into our shops.”
Newcastle shopkeeper John McClurey, who says tobacco sales aren't worth as much to his business as you might think
John might have to keep on selling tabs for now, but says he can’t wait to stop.
“I won’t be able to walk away from selling tobacco any time soon but I look forward to the day when I can,” he said.
“I would rather sell birthday cards to my customers well into old age than sympathy cards.”
The report being presented, commissioned by Action on Smoking and Health (ASH), shows nearly 80% of sales in small shops don’t include a tobacco purchase, and smokers don’t spend significantly more in corner shops, outside of their tobacco purchases, than anyone else.
And the average profit margin on tobacco is just 6.6%, compared to an average of 24.1% for non-tobacco products.
Nearly three quarters of shopkeepers questioned said they thought too much money was tied up in smoking stock, while a quarter said they regularly had problems with the cost of stocking up.
ASH chief executive Deborah Arnott said: “Nearly half of smokers buy cigarettes from corner shops, so for the tobacco industry it is essential that it puts a lot of effort into persuading retailers to maintain the profile of tobacco sales in those stores.
“Tobacco is a high-cost, low-profit product and money spent on tobacco is money not available for other more profitable purchases. Our report invites retailers to see the long-term decline in smoking as an opportunity, not a threat.”
Resource: http://www.chroniclelive.co.uk/news/north-east-news/think-cigarette-sales-keep-local-12039684
Tobacco sales are not vital to keeping small corner shops afloat, and might actually be harming their profit margins, researchers claim.
A report being presented to parliament today says small shop owners make only small profits from tobacco sales, and many feel they have too much cash tied up in the expensive products.
Newcastle shopkeeper John McClurey joined anti-smoking campaigners in Parliament at today’s launch.
John said he hoped to demolish the myth that cigarette sales are vital to keeping small local businesses afloat.
He said: “I have little choice other than to sell tobacco as many of my customers still smoke.
“But tobacco makes me very little money while tying up plenty of cash in stock. Tobacco is a burden to me, to say nothing of the ill health it imposes on my customers.”
John says he, and many others who run newsagents, would rather put their money into products which turn a high profit.
He said: “I make about 36p on a packet of 20 cigarettes compared to 20p on a pack of chewing gum or 57p on a Sunday newspaper.
“Times are changing and we are seeing fewer and fewer people smoking. Cigarettes have disappeared behind gantry doors, and we are shifting to ‘plain’, standardised packaging.
“The tobacco manufacturers now need us more than we need them. They work hard to keep large tobacco stocks in shops, but it seems outdated now that we still give up so much prominent space at the till to these products.
“The alternative is to reduce stock, shift the cigarette gantry well out of the way and free up space for products that actually turn a decent profit.
“As retailers, we can keep our customers who smoke, improve our profitability and make tobacco truly invisible to the many young people who come into our shops.”
John might have to keep on selling tabs for now, but says he can’t wait to stop.
“I won’t be able to walk away from selling tobacco any time soon but I look forward to the day when I can,” he said.
“I would rather sell birthday cards to my customers well into old age than sympathy cards.”
The report being presented, commissioned by Action on Smoking and Health (ASH), shows nearly 80% of sales in small shops don’t include a tobacco purchase, and smokers don’t spend significantly more in corner shops, outside of their tobacco purchases, than anyone else.
And the average profit margin on tobacco is just 6.6%, compared to an average of 24.1% for non-tobacco products.
Nearly three quarters of shopkeepers questioned said they thought too much money was tied up in smoking stock, while a quarter said they regularly had problems with the cost of stocking up.
ASH chief executive Deborah Arnott said: “Nearly half of smokers buy cigarettes from corner shops, so for the tobacco industry it is essential that it puts a lot of effort into persuading retailers to maintain the profile of tobacco sales in those stores.
“Tobacco is a high-cost, low-profit product and money spent on tobacco is money not available for other more profitable purchases. Our report invites retailers to see the long-term decline in smoking as an opportunity, not a threat.”
Resource: http://www.chroniclelive.co.uk/news/north-east-news/think-cigarette-sales-keep-local-12039684
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