Small Retailers’ Tobacco Sales and Profit Margins in Two Disadvantaged Areas of England

• Main Authors: Sara C. Hitchman, Robert Calder, Catriona Rooke, Ann McNeill
• Format: Article
• Language: English
• Published: AIMS Press 2016-03-01
• Series: AIMS Public Health
• Subjects: tobacco; tobacco retailers; tobacco economics; tobacco industry
• Online Access: http://www.aimspress.com/aimsph/article/678/fulltext.html

<strong>Aim: </strong>To explore tobacco profit margins and sales among small retailers in England. <strong>Methods: </strong>Interviews with managers/owners of 62 small retail shops that sold tobacco in disadvantaged areas of Newcastle and London, England. The interviews included questions about tobacco sales and profit margins, and interest in reducing reliance on tobacco sales. <strong>Results: </strong>The majority of retailers (89%) reported low overall profit margins on tobacco sales (&lt; 6%). The most common response was a profit margin of 4–6%,with some reporting lower margins for price-marked packs of cigarettes (1–6%) and higher margins for non-price marked or premium brands (7% to over 10%). A few mentioned higher profit margins for e-cigarettes. Despite this, most thought tobacco sales were important (90%), and attributed this reliance to footfall (81%), i.e., customers purchasing tobacco also purchasing other products. 42% of retailers expressed interest in reducing their reliance on tobacco sales. <strong>Conclusions: </strong>Small retailers report low tobacco profit margins, but high reliance on tobacco sales because of footfall. Retailer interest in reducing reliance on tobacco sales warrants further research into opportunities for disinvestment. Additionally, retailers’ belief that they are reliant on tobacco sales because of footfall should be further investigated.