THE recession has seen smokers scanning the shelves for the best value on offer. And that has led to a growth in PMPs on the country’s tobacco gantries. The price-marked smoking products currently make up 36.6% of overall volume sales across Scotland according to Nielsen, says tobacco firm BAT, the company behind Pall Mall, Cutters Choice and other brands. That’s up from 32.6% over the same period in 2012.
But for independents and symbol stores PMPs are still more important, in fact very much more important, reaching 58.2% of total volume to date this year versus 52.7% over the same period in 2012.
Ronald Ridderbeekx, acting head of corporate and regulatory affairs at BAT in the UK and the Republic of Ireland, said: “As you would expect, more value-centric offers such as Pall Mall and the growing RYO category, account for a higher proportion of the PMP volume.
“BAT UK’s RYO brands have grown particularly well within UK independents, with volume up over 2.4% to date this year versus the same period in 2012.”
Jeremy Blackburn, JTI’s head of communications, agrees that PMPs are crucial to tobacco marketing. “In these tough economic times, it’s important that manufacturers and retailers demonstrate to adult smokers that they are getting the best possible choice and value when making their tobacco purchase,” he said.
“Price marking does exactly this whilst also driving footfall, customer loyalty and associated purchases.”
At Philip Morris, international marketing director for the UK and the Republic of Ireland, Zoe Smith, says PMPs help branded products to reach out to customers who are considering trading down.
“One of the key trends we are still witnessing in tobacco retailing is adult smokers seeking value for money and down-trading,” she said.
“Communicating value for money is very important so PMPs are invaluable to the independent retail trade in order to retain adult smokers and to help increase their loyalty to the retailer.
“Research by HIM shows that PMPs reassure adult smokers of value for money, and the majority would always buy them over non-price marked packs if they were available.”
The lower-priced the market segment is, the more important PMPs become, the company says. Nielsen figures are said to show that PMPs in the super low price segment account for 81% of all super low sales in independents and symbols, compared to 75% in 2010.
“Affordability remains a challenge, which is why we also offer Marlboro Gold Touch, a slightly thinner Marlboro Gold cigarette with a competitive RRP of £6.75 for 20,” Smith said.
“Consumers expect more for their money without sacrificing quality. Recognising the importance of this segment, we offer Chesterfield, a high quality cigarette with an RRP of £6.25.
“Price-marked packs are a useful tool for retailers to compete with large multiple operators. Philip Morris Limited is committed to supporting independent retailers by providing a range of products that deliver on quality and price, and a key principle of sales remains availability and price.
“Training and development of staff is essential. Knowing about the products you sell and where they are on the gantry is important, and being able to help adult smokers with their purchase decisions will set you apart from the competition.”
