UNVEILING THE GROWTH POTENTIAL OF TOBACCO ACCESSORIES DESPITE PRICE INCREASES AND CANNABIS OPPORTUNITIES.
As a tobacco retailer, staying informed about market trends is crucial to making strategic business decisions. Despite ongoing inflation and price increases across the tobacco industry, smoking accessories are proving resilient, with promising growth potential. Moreover, the legalization of recreational cannabis in several states presents an exciting opportunity for expanding the tobacco accessories category. Let’s delve into the latest data and insights to understand how your tobacco shop can thrive in this evolving landscape.
Strong Resilience in Tobacco Accessories Sales: While prices are on the rise, smoking accessories are holding their own in convenience stores. Data shows that smoking accessories overall achieved robust dollar sales, growing by 6.6% for the 52 weeks ending April 23, 2023. This demonstrates that consumers are still willing to invest in these essential items despite price increases.
Long-Term Positive Outlook for Tobacco Accessories: A comprehensive analysis by Allied Market Research predicts that the global smoking accessories market will reach a staggering $6.3 billion by 2030. This projected growth, with a compound annual growth rate of 6.5% between 2021 and 2030, showcases the enduring appeal of tobacco accessories.
Impact of Price Increases: Retailers like Nissan Koroghli, a 7 Eleven franchisee, have experienced a steady demand for accessories, even with price increases. While the price of tobacco products, including cigarettes, has risen by about 10%, customers continue to purchase accessories like lighters and matches.
Shift in Consumer Behavior: As the cost of tobacco products climbs, some customers may opt for lower-priced lighters and accessories to manage their expenses. However, this does not appear to diminish the overall demand for smoking accessories.
Cannabis Accessories: A Lucrative Opportunity: With the legalization of recreational cannabis in multiple states, convenience store retailers recognize an opening to expand their tobacco accessories category to include cannabis-related products. For instance, cannabis accessories such as rolling papers and pre-rolled weed cones are expected to see a boost in sales.
Diverse Options for Cannabis Customers: Retailers like Koroghli anticipate increased sales of vape cartridges and lighters in various price ranges as cannabis customers seek these accessories to complement their smoking experience.
Discretionary Impact of Cannabis Legalization: While some believe that cannabis legalization will drive accessory sales in convenience stores, others argue that dispensaries already offer a wide range of accessories. However, convenience stores remain optimistic, as cannabis customers frequently visit their locations for other items, creating opportunities for accessory sales.
Final Words
The tobacco accessories market continues to show resilience, despite price increases and challenges from the pandemic. For savvy tobacco retailers, there is significant potential to capitalize on the rising demand for accessories in a shifting landscape, including the burgeoning cannabis market. By adapting to consumer preferences and exploring new opportunities, your tobacco shop can thrive and stay ahead of the competition.
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