The declining importance of tobacco sales to convenience stores in Britain

Tobacco products are becoming less important to the business models of convenience stores across Britain. This is the finding of our new study of the products sold in convenience stores over a 3 year period across England, Scotland and Wales prior to the start of the Covid pandemic. 

Looking at the sales of tobacco and other products sold alongside tobacco is important because it tells us about how much profit is made from tobacco by smaller retailers but also about the role of tobacco in generating greater ‘footfall’ for these smaller retailers. It is argued that footfall products, such as milk or bread, bring customers into the store and lead to wider expenditure on other (non-footfall) items.  The tobacco industry has long argued that tobacco is vital for increasing customer footfall and therefore tobacco products help drive the sales of other (potentially more profitable) items that retailers stock. Our new results recently published in the journal Tobacco Control suggest the footfall argument made by the tobacco industry does not hold-up to scrutiny.

How did we go about our research? We looked at this issue by examining the electronic till receipts of all items purchased in almost 1300 retailers across the country during 4 corresponding weeks in 2016 and 2019. We found that the number of shopping baskets containing tobacco fell by nearly half (47%) over these 3 years. When we compared tobacco to other commonly purchased products (such as milk, bread, newspapers and alcohol) we found that the decline in sales was much higher for tobacco.

We also discovered that the price of tobacco products rose significantly over this time period yet at the same time the proportion of total store turnover accounted for by shoppers who included a tobacco product in their basket fell. In 2016, 11 per cent of transactions involved only tobacco, but this fell to 6 per cent in 2019. The proportion of sales containing a mix of tobacco products and other items also declined, falling from 14 per cent to 9 per cent.  It was also evident that as the frequency of tobacco transactions declined so the financial value of non-tobacco items bought alongside tobacco also reduced.

When we examined geographical differences in the sales data, we found that retailers’ declining reliance on tobacco sales was seen across the country. Tobacco product sales, and their contribution towards weekly turnover, were higher in shops in urban, more economically deprived areas compared with rural stores and those in affluent areas. However, these stores saw the greatest reductions over time, narrowing the differences between areas.

Why does all this matter? The governments in England, Scotland and Wales all have ambitious targets to eliminate smoking over the next decade. For example, in Scotland the Scottish Government is committed to reducing the proportion of the population who smoke to 5% by 2034. Similar targets are in place in England and Wales. Yet meeting these goals will require a wide range of policies including reducing the availability of tobacco products. In Scotland, for example, tobacco remains highly available with around 10,000 retailers selling tobacco which means it can be purchased on most street corners. A key obstacle to reducing the number of places where tobacco can be purchased has been concerns about how this will affect smaller businesses that may be particularly dependent on selling tobacco, and also that selling tobacco helps to drive the sales of other (more profitable) products. Our findings counter this claim and show that tobacco is becoming less important to smaller retailers.

We, therefore, encourage policymakers in the UK to follow the lead of the New Zealand government who have an ambitious plan to greatly reduce the number of tobacco retailers, as well as the recommendations of The Khan review: making smoking obsolete report commissioned by the UK Government to develop new policies in England that will lessen the availability of tobacco in our local communities. Policy approaches should include help for businesses to diversify away from tobacco, including support for smaller stores to focus on more health enabling and more profitable products. This would be a crucial step towards reducing the number of people who smoke, and eliminating a product that is responsible for the deaths of 78,000 people in the UK each year.

Tunstall H, Shortt N, Kong A, Pearce J, 2022. Is tobacco a driver of footfall amongst small retailers? A geographical analysis of tobacco purchasing using electronic point-of-sale data. Tobacco Control. In Press.

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