With more than one in four adult smokers now choosing to smoke roll-your-own (RYO) tobacco, new research commissioned by tobacco manufacturer JTI has identified that retailers are now capitalising on this profit opportunity and recognise that RYO is an important source of income for their store.
The majority of retailers (83%) surveyed as part of the study believe RYO sales, which were worth £1.3bn in 2010, will remain consistent or increase in the coming year, having been the fastest growing tobacco sector in the UK for the last 10 years.
Over half of retailers surveyed have witnessed regular adult tobacco buyers switching from cigarettes to RYO tobacco, demonstrating the increasing importance of the RYO category in their tobacco offering. Along with the desire for greater value for money more adult smokers are ‘dual smoking’ and choosing RYO products for their lower price points and cigarettes when they have more money to spend.
Retailers recognise that the need to offer value and choice is key to maximising their RYO sales. Over three quarters of retailers (79%) surveyed said they include price-marked stock within their RYO range, ensuring that adult smokers can see they are getting best value when they make their purchase.
Nearly 70% of retailers surveyed have added 25g and 50g pack sizes to their RYO range in the last 12 months. The 25g and 50g pack sizes, which offer adult smokers greater value for money, are in growth and offer retailers the opportunity for even more profit.
Jeremy Blackburn, JTI’s head of communications in the UK, says: “We know that RYO has been growing significantly over the last 10 years – the UK market has doubled in size in that time, and this research highlights just how important it now is to retailers.
“By understanding best practice and through practical insight from retailers throughout the UK, other retailers can benefit from the findings in order to help maximise the sales opportunity that exists within the RYO sector. As more adult smokers strive for greater value when purchasing tobacco, the RYO market is only going to get bigger, so it’s important to be prepared in order to profit from this future growth.”