With typically three times the profit margins of cigarettes,
the cigar category pays dividends if you get it right
The UK cigar market is well established and may not be as dynamic or fast-moving as something like vaping, but it is still worth just under £200m in annual sales and the products within it typically offer three times better profit margins than cigarettes, so it’s absolutely one that is worth getting right. Leading brands like Signature remain big drivers of footfall in-store and something customers will seek out, so don’t be caught out of stock.
The trend is your friend
The cigar category is a very important and profitable one. Successfully managing and maximizing benefit from the category requires knowledge of the trends in the market, understanding of the demand and preferences in your area, and stocking the right range of products.
Miniature cigars continue to dominate the market. The segment is led by the premium bestseller Signature brand, followed by Moments Blue, the fastest growing brand in the UK.
The VFM segment is also on a constant upward trend as consumers start seeking quality cigars at an affordable price, allowing brands like Moments Blue to thrive.
Small/Panatella sized cigars are also on the rise. Moments Panatella, also a VFM brand, is thriving while benefiting from two trends at the same time.
The medium large sector has seen an increase of late, perhaps aided by the increase in people having more time to spend at home. Traditionally a summer and winter best seller brands such as Henri Wintermans Half Corona should always be on shelf.
Stock the right range.
Stocking the right range of brands that cater to the store/gantry size, the demand in your area and consumer preferences goes a long way in maintaining traffic in your store. Be sure to cover all segments – size and price point – which are relevant to your area.
Know what tobacco products are in demand in your area.
And stock the right products accordingly. Convenience stores have a competitive advantage against multiples in that they are more personal and tend to engage more with their consumers. Take advantage of this to know what your consumers like and want stocked, and they will surely keep coming back.
Availability is extremely important.
Always make sure your stock is up to date. 22% of customers will not return after experiencing one out of stock of their products, and 41% will not return if their product’s out of stock for the second time.
Staff training is crucial.
Many customers take convenience store staff recommendations very seriously. So it is extremely important to train staff on tobacco products offered so they sell the right tobacco products to customers based on preferences.
Know and understand the legislation.
It is very important to keep your gantry and store in a lawful state. Be sure to check and stay up to date with legislation as it is constantly being updated.
Know your profit margins.
Knowing which products have high margins and actively selling those products will no doubt increase your profits and grow your business. Remember, cigars have double the profit margin of cigarettes, so they are worth pushing.
Using a planogram is essential to not only maximise your profit per shelf, but also to help your staff remember where products are to be found when dealing with customers. If you want further advice on how to maximise your sales please book a visit from one of our trade reps who will be happy to advise you.