'Impact is negligible' Buying group
?We are not unduly worried by the smoking ban in England and this is mainly based on the experience of our Scottish wholesalers. In Scotland, sales to traditional CTNs suffered a decline as consumers stopped purchasing tobacco on the way to work in the morning. However, sales to licensed convenience stores increased as more people purchased cigarettes with alcohol in the evening because they were staying at home instead of going to the pub. The impact on sales was fairly negligible. Irrespective of the ban, we are trying to become less reliant on tobacco because this is the way we see the market going. The alcohol and chilled goods categories are growing and becoming more important to our business. This is a trend that is set to continue.
'Margins are low' Scottish wholesaler
?When the ban came into force up here in March 2006 we did see an initial downturn in sales, presumably as many people tried to use it as an opportunity to give up smoking. There was also a large amount of press encouraging people to quit by offering them help and advice. This had an effect on sales of tobacco across the board. But the effect was nowhere near as bad as many had predicted. Since then sales have recovered and are now showing strong growth. We do not think there will be any fall in profits as the sector offers fairly low margins anyway. The likely long-term view for what are considered unhealthy categories, such as tobacco, is negative and so these are not areas we consider a priority for the future. As a business we are looking to what we see as the main growth areas - fresh and healthier food.
'It's too early to tell' Delivered wholesaler
?We are concerned by what effect the ban will have on sales, but it is much too early to get a picture of what the outcome will be. As a wholesaler, this would appear to be just one more variable for us to consider. Tobacco sales value is resilient. In 2005 our tobacco sales in June were 35.7% of our delivered warehouse sales and, despite all the pressure and price increases since then, in the same month this year tobacco sales were 36.2%. Pack volume, however, is down by about 7% .
Our sales were down about 2% during the first four days following the ban, but it is far too early to call that a trend. One of our retail customers told us his sales on the first Sunday following the introduction of the new law were up £500 compared with the same day the previous week. Like most in the industry, we are trying to cut our dependence on the category. In our case we are focusing on fresh food and food to go.