CIGARETTES VERSUS RYO

THERE’S nearly a 50/50 market share split between cigarettes and RYO, says Tom Gully, head of consumer marketing UK&I at Imperial Tobacco, at 54% and 46%, respectively.

“We’ve seen shopper demand for value gain momentum as a result of the cost-ofliving crisis, and we’re now seeing the lower-priced tiered products account for the larg- est proportion of tobacco sales,” he says. “In cigarettes, the sub-economy segment is now 63% of sales, while the economy segment accounts for just over half (56%) of RYO.”

Gully expects value to remain the dominant trend and this can have a positive impact for retailers’ margins. As demand grows for RYO, tobacco accessories such as Rizla Sil- ver Kingsize Combi and Republic Technologies’ OCB provide a substantial sales opportunity and give good margins for retailers.

However, the concern for Cruden is that he says 90% of RYO now comes with papers and lters included, which is hitting separate sales of accessories, so retailers should consider this when stocking up.