While there are those who would like to see cigs go up in smoke, c-shop operators can rest assured that this decisive category will continue to be brightly with activity. “Among the trends I see for 2012 is that there is going to be continued or exaggerated competition among the second rank brands,” declared Bonnie Herzog, managing director for beverage, tobacco and consumer study for Wells Fargo Securities in New York. “We’ve been sort of indicating that the ‘battle of the smoking brands’ among the second tier should continue.”
Included among the smoking brands Herzog and other tobacco analysts place into that second rank are Pall Mall, L&M, Maverick, Marlboro Special Blend and Newport Red. “That core group of brands will be fighting it out with increased ads activity and attention behind those cigarettes throughout the year,” she explained.
The top tier, Herzog argued, is still a place for which convenience shop operators need to contribute space.
“That will help to drive foot traffic into the shops,” he added.
Pricing throughout 2012, Herzog explained, will remain firm.
“I think the breaks between these different tiers will need to stay narrow given that many tobacco consumers are still facing financial pressures, most likely through to quit in this year, and that certainly puts some pressure on this category,” he reported.