Philip Morris is hoping to extend the reach of its low-price Basic range of cigarettes with a new superkings version, as budget lines continue to drive growth in the stagnant tobacco market.
Basic Superkings will be available in 20s in Virginia and Fine Virginia flavours from July, with price-marked packs at £3.85. They are being distributed throughout northern England. Philip Morris believes this is the most suitable region in which to launch a price-sensitive cigarette to consumers.
The company, which launched its Basic range in July 2004, said sales had performed in line with expectations since the brand’s debut. Total volume sales of cigarettes dropped 2.9% to
£52.1bn last year [RAL 52 w/e ending December 2004].
“Super low price cigarettes continue to be an extremely attractive segment to consumers,” said Javier Muller, Philip Morris’ general manager in the UK. “Through Basic we are providing adult smokers with a high quality cigarette at a low price and the reaction so far has been extremely encouraging.”
According to Philip Morris, super low price cigarettes account for more than 38% of total cigarette sales. Superking varieties of super low priced brands are growing at three times the rate of king size cigarettes in the super low price range, the company said.
Meanwhile, Londis says its latest cigarette sales figures demonstrate extreme price-sensitivity in the market.
The independent reported a year-on-year sales increase of 9% since the group introduced its new lower pricing scheme, which includes the wholesale price of a case of Lambert & Bulter Silvers dropping from £36.09 to £35.89 (10 x 20).
“The first week after reducing prices, sales jumped by 19%,” said John Taylor, head of buying for impulse at Londis.
Stefan Chomka