News from Convenience Stores - Competition for Space is Getting Ruthless..

March 22, 2008 - News from Convenience Stores - Competition for Space is Getting Ruthless.. The big three U.S. cigarette companies: Philip Morris USA (PM), R.J. Reynolds Tobacco and Lorillard are aggressively competing for advertising space in convenience stores. The point-of-purchase environment, i.e., the convenience store is the main channel through which tobacco companies can entice new tobacco users and retain existing smokers. No longer can tobacco companies advertise on TV, radio, or on billboards and are very limited in print media. The tobacco industry spends more on in-store advertising than all other forms of advertisement combined in 2004 - $11.86 billion vs $2.29 billion. These companies pay promotional allowances to retailers to stock and display their products according to exact specifications. For this particular c-store Philip Morris is demanding 65% of the display space because they claim PM tobacco products are 65% of tobacco sales. Already PM threatened to cut off the store's off invoice allowance if one of the center shelves now occupied by Lorillard brands aren't removed and replaced by PM tobacco products. As the congressional bill to have the federal government provide tobacco regulation, that PM supports, makes its way through the U.S congress the tension grows amongst PM competitors. It is thought that PM was involved with crafting this bill - e.g. in the latest version of the bill, cloves joined menthol as the only additives specifically allowed in tobacco. The competitors are opposed to the bill, indicating it would lock in PM's dominant market share (Raleigh News & Observer). The legislation calls for c-stores to place tobacco products behind the counter - what good is that?? - there should be no tobacco advertising (inside and outside of stores) and tobacco products belong under the counter. In this store Camel SNUS sales have been so poor (at most one can per week) that the expiration date has passed and all remaining cans had to be returned. Click on image to enlarge.. (