Lower priced cigarette brands continue to gain market share as smokers’ purses and brand images face relentless war
A combination of market and legislative forces has encouraged cigarette smokers to trade down over the last few years.
Regular tax increases that continue to make cigarettes relatively more expensive in comparison to other products are encouraging smokers to trade down.
The most notable change is the overall trend away from premium and mid-priced cigarettes as the lower priced brands continue to gain market share.
Many make this transition in stages, opting to smoke premium brands on weekends and low-price brands during the week.
This trend has been supported by manufacturers and retailers who have added to the proliferation of value brands.
This is particularly noticeable in the growing Superkings segment, which was traditionally dominated by more expensive brands like John Player Superkings, but has seen the launch of a number of lower priced brands, which have grown to dominate the segment.
Key upward brand movements have been the continued rise of the lower-priced brands, in particular Richmond Superkings, Mayfair Kingsize (+8.5%), Richmond Kingsize (+8.8%) and Mayfair Kingsize Smooth (+20.4%).
The category’s number one brand, Lambert & Butler Kingsize, has passed the £4 price point this year and is struggling to maintain the sales of previous years.
The bulk of product development has come in the form of value propositions, such as Benson & Hedges Silver and Mayfair Superkings.
All these brands contributed to the growth of the lower end of the category. Indeed, such is the strength of the lower-price brands that Marlboro Gold (previously Lights) is the only premium brand to demonstrate growth (+8.7%).
However, this also indicates it is possible for a premium brand to grow despite the current climate in the wider cigarette market, a clear message that smokers’ purchasing decisions are based on more than price alone.
It would appear that the more profitable premium brands still have a large part to play in the market.
Total category volume is down from 52.9 billion sticks in the year ended September 2002, to 51.9 billion sticks in the current year, a decline of 1.9%.
A combination of market and legislative forces has encouraged cigarette smokers to trade down over the last few years.
Regular tax increases that continue to make cigarettes relatively more expensive in comparison to other products are encouraging smokers to trade down.
The most notable change is the overall trend away from premium and mid-priced cigarettes as the lower priced brands continue to gain market share.
Many make this transition in stages, opting to smoke premium brands on weekends and low-price brands during the week.
This trend has been supported by manufacturers and retailers who have added to the proliferation of value brands.
This is particularly noticeable in the growing Superkings segment, which was traditionally dominated by more expensive brands like John Player Superkings, but has seen the launch of a number of lower priced brands, which have grown to dominate the segment.
Key upward brand movements have been the continued rise of the lower-priced brands, in particular Richmond Superkings, Mayfair Kingsize (+8.5%), Richmond Kingsize (+8.8%) and Mayfair Kingsize Smooth (+20.4%).
The category’s number one brand, Lambert & Butler Kingsize, has passed the £4 price point this year and is struggling to maintain the sales of previous years.
The bulk of product development has come in the form of value propositions, such as Benson & Hedges Silver and Mayfair Superkings.
All these brands contributed to the growth of the lower end of the category. Indeed, such is the strength of the lower-price brands that Marlboro Gold (previously Lights) is the only premium brand to demonstrate growth (+8.7%).
However, this also indicates it is possible for a premium brand to grow despite the current climate in the wider cigarette market, a clear message that smokers’ purchasing decisions are based on more than price alone.
It would appear that the more profitable premium brands still have a large part to play in the market.
Total category volume is down from 52.9 billion sticks in the year ended September 2002, to 51.9 billion sticks in the current year, a decline of 1.9%.
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