Smoking Accessories – Up In Smoke?

 

In order for smoking accessories to succeed in today’s world they must first adapt to the squeeze put on them by regulations. Typically this list include lighters, rolling papers, cigarette rolling machines, tubes, snuffers, ashtrays, hookahs, etc…

For the year ending April 16, 2017 smoking accessories totaled $254 million up 1.7% from the year before according to the Information Resources Inc and their convenience all scan data for that period.

Dwindling Portion

Overall tobacco prices have continued to climb, said Steve Magestro, President of Mad Max Convenience Stores based in Saukville, WI who has several stores around the State. “We are trying to run as many promotional prices on key (tobacco) items as we can to try and help drive the sales. More and more promotions seem to be a two-for deal of some sort and more promotions seem to be coming out, usually driven by the manufacturer.”

Mad Max Convenience Stores sells a variety of smoking accessories from lighters to rolling papers, wraps and tubes. “The accessories category does seem to be shrinking along with the total dollars sales for the tobacco category,” said Magestro, who has seen the segment decline over the past five years. “The category has really changed in our locations. Not for the better either.”

Magestro sees a meeting of the minds for the smoking accessories and tobacco products industries and he remembers a time when humidors sold like crazy then slowly faded away. “We have really nice displays in our locations, but so many of the items I remember from years ago, just do not sell anymore.”

Five years from now, Magestro predicts that the smoking accessories category will see an evolution toward new items and/or brands that will keep costs low to entice old and new customers alike.

“Manufacturers are making a two-for deal (on tobacco products) the norm versus the occasion. I think because the market is getting smaller and the prices are increasing—like anything else, this is a factor,” Magestro said. “Wraps have really increased over the last several years, but they are so cheap to buy that it does not help the category drive dollars.”

“I see it being a category that will continue to shrink as time goes by,” said Magestro. He predicted inner-city stores will sell cheap wraps and other accessories, while the suburbs will see this segment “get smaller and smaller.”

Empire Petroleum Partners, with 1,600 retail partners in 32 states, sells lighters, rolling papers and e-cig cartridges among its smoking accessories, with Bic lighters and cheap lighters being the most popular accessories with customers.

BOGO Free

Kip Fruge, senior director of operations and merchandise programs, Dallas-based Empire Petroleum Partners LLC, said state and local mandates to make age 21 the legal age for tobacco use will bring a further dip in cigarette sales.

“I would expect accessories would follow suit,” Fruge said. Empire Petroleum has been working to incorporate electronic cigarettes, and with that provide cartridges as part of its accessories options.

In order to drive sales in the segment, Empire Petroleum motivates its customers to upsell accessories with a tobacco purchase with monthly sales contests.

“We’ve done a couple sales contests this year for our associates tied to upselling lighters. The easiest thing to do is ask customers if they want a lighter,” said Fruge.

“The second thing is to make sure associates know how each lighter is priced. No. 3 is to offer a discount on multiple lighters, so you can sell two with one sale.”

Despite efforts to upsell, Fruge expects the category to be flat, given the pressures on the segment; however, he noted his stores have a tendency to buck trends. “We’re actually slightly above prior year in cigarette sales.”

Time will tell if smoking accessories follow.

Greg Elam –
Content Writer – Windy City Cigars