For most consumers, lighters, ashtrays, papers, matches and pipes may be impulse purchases, but for c-stores, they shouldn’t be an afterthought. Granted, tobacco accessories account for the smallest percentage of tobacco-related transactions, both in numbers and dollars, but each additional basket item offers a chance to boost profits with every tobacco sale.
Even at an average price of $1.82 per unit, according to IRI research, this category offers a lot of potential. The Consumer Product Safety Commission estimates 1 billion lighters are sold each year. IRI reports U.S. c-stores sold nearly 155 million units of items considered tobacco accessories for the 52 weeks ending Dec. 29, 2019.
However, as cigarette sales continue to fall year after year, accessories have also taken a hit. IRI data revealed the category’s unit sales dropped by 2% over the past year.
Although lighter sales haven’t burned out for John Archer, who owns the Shell Food Mart in Hinsdale, Ill., he has seen a downtick since the state went to 21 minimum purchase age last July. “With the dip in cigarette sales, we’ve had a dip in lighter sales,” he said.
For stores located in areas that incurred stricter tobacco regulations, the circumstances have delivered an even larger blow to the category. In Minnesota, many of the Bobby & Steve’s Auto World sites were forced to comply with local ordinances that dictated both tobacco retail pricing and product selection, which influenced sales of accessories.
“We saw a 15% decrease in lighter sales, but we were faced with a menthol ban in 40% of our stores,” said Madalena Ferreira Morgan, director of convenience store operations for Bobby & Steve’s Auto World, which operates eight c-stores in the Twin Cities region. “What I can offer becomes limited. For these locations, we focus on what we can offer and make sure we educate the consumer on other choices.”
Still, the expanding market for legalized cannabis has ignited some fresh interest in tobacco-related accessories and other items associated with cannabis use. A 2019 BDS Analytics report stated global cannabis sales garnered $15 billion last year, with more than 80% coming from the U.S. Sales doubled last year in seven states, and adult-use purchases of cannabis products grew by 45%. The research firm also anticipates the market to grow by another 38% this year and potentially exceed $40 billion within four years. That offers serious potential for peripheral products, even if c-stores don’t officially enter the cannabis industry.