Independent retailers could be in line for a £1bn sales bonanza when supermarket tobacco sales go dark next year.
Booker CEO Charles Wilson defied doom-mongers this week to predict the advent of the tobacco display ban in supermarkets could be the biggest year for the independent sector since 1994, when the National Lottery was launched.
Stores over 3,000 sq ft will no longer be able to display tobacco from April next year, but smaller stores will be exempt from the ban until 2015.
The multiples currently sell £5bn worth of tobacco a year, the same as the independent trade. However, Wilson has predicted the independent sector could steal as much as £500m of extra sales from the multiples as shoppers choose to buy cigarettes in stores unaffected by the ban.
And overall footfall in independent stores could be boosted by as much as two million consumers a week by the extra trade the sales generate.
“We’re predicting a 10% switch to the independent trade, which is about £500m worth of sales,” said Wilson. “Add to this £500m of incremental sales and that’s £1bn - a 20% increase in sales. No one is talking about this in the trade. All everyone is talking about is the doom and gloom, but we believe there’s a real opportunity to be had here. We are calling it D-Day.”
Data from other countries where a tobacco display ban is already in operation, such as Australia, found transaction times had increased as staff took longer to locate the correct product. Longer queue times at supermarket kiosks would also boost indies, Wilson predicted.
He added that own-label tobacco lines would also benefit because shoppers would ask staff for the cheapest product if they could not see what was available. Booker’s Red Band own-label range, relaunched earlier this year, has increased sales by 30%.Booker will be promoting the opportunity to customers from January.
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