Retailers Create NEW Shopping Holiday Called 10.10
Based on the popular China’s Singles’ Day, more than 24 retailers have signed on for the event.
I say WHY NOT! Let’s have an early shopping date to kick off our economy.
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September 16, 2020
NEW YORK—Nov. 11—Veteran’s Day in the United States—is the world’s biggest shopping event, but not for reasons Americans would expect. China’s Singles’ Day, also held on 11/11, has become a sales juggernaut, and now U.S. retailers are hoping to create a similar shopping event in the United States, Bloomberg News reports.
This year, more than two dozen retailers, along with the Shopkick reward app, have agreed to promote deals on 10.10 (October 10), according to event mastermind Deborah Weinswig, a retail consultant.
The event aims to generateholidayshoppinginOctober to help retailers manage shipping capacity, available merchandise and crowd control.
“If we don’t pull it forward, then it won’t happen,” said Weinswig. Retailers are already scrambling to purchase merchandise from stores going out of business because of light inventory stockpiles. “There’s just literally so little in the pipeline,” she said.
While the majority of holiday shopping happens in the weeks closest to Christmas, Weinswig hopes 10.10 will help shoppers realize they can’t cut it close when it comes to buying gifts this year. For example, shipping times in December will likely be longer than normal. “There is no capacity,” she said. “We’re seeing people who have never shopped online shop online.”
Already, retailers are looking to shift holiday spending over more weeks. For example, Home Depot has announced it will start Black Friday deals in early November, while American Eagle Outfitters is also trying to entice holiday shopping sooner. Amazon’s Prime Day will likely also be held in October, rather than its usual July date.
Great article from CStore Decisions. A bit lengthy but there is some great information here. Nice @Nielson information also.
Rising sales are boosting retailer optimism across the category, but regulatory hurdles loom.
Tobacco sales have proved a bright spot for many convenience stores during the COVID-19 pandemic, but while c-stores anticipate robust tobacco sales for the remainder of 2020, retailers are bracing for the potential chill of regulatory headwinds.
As the pandemic first hit the U.S., many customers began hoarding tobacco products — particularly cartons of cigarettes — ahead of shelter-in-place rules, according to data from the InfoMetrics database managed by consulting services firm Management Science Associates (MSA).
“As the stay-at-home situation has continued, there has been increased consumption of all types of tobacco items with the exception of vape, possibly because consumers are at home and not in locations where there are restrictions on its use,” said Don Burke, senior vice president of MSA.
A poll by consumer intelligence research platform CivicScience found that from April 28 to May 11 — at a time when most areas of the country were still experiencing stay-at-home orders — 31% of cigarette users reported smoking more frequently, and 28% of e-cigarette/vape users reported vaping more frequently. Some 44% of cigarette smokers and 34% of smokeless, e-cig and cigar users reported buying their tobacco product at a c-store most often during the same period.
Research firm IRI’s Convenience All Scan data found smokeless tobacco dollar sales grew 7.8%, with spitless up a whopping 80.6% for the four weeks ending April 19, 2020. Tobacco accessories dollar sales were up 33%, and cigars climbed 13.1%, while cigarettes dropped 2.4%, and e-cigs dipped 1.1% for the same period. Nielsen data showed e-cigs down 8.5% and cigarettes down 5% for the four weeks ending April 25, 2020, but similar upticks in other tobacco products, with cigars up 11.3%, pipe tobacco up 14.1% and “shag” or rolling tobacco up 28%.
Depending on location, c-store retailers are seeing various realities and differing surge/decline timelines when it comes to tobacco sales.
Doug Galli, vice president and general manager for Reid Stores and Crosby’s, said sales of other tobacco products (OTP) including cigars, snuff and e-cigarettes climbed at the company’s 82 c-stores in New York and Pennsylvania, ahead of shelter-in-place rules.
Year over year through April, “cigars are up 7%, e-vape is up 29% and the ZYN/Velo category that was non-existent last year has shown some legs. That category is 50% of the lift over last year,” Galli said. He added that moist snuff was down slightly for the same period.
On Feb. 6, 2020, the Food and Drug Administration (FDA) ruled that c-stores and other retailers can no longer carry display cartridge-based e-cigs or vaping pods in flavors other than menthol and tobacco, but flavored disposable e-cigarettes are still legal.
“The FDA attempted to strike a balance between protecting adult access to flavored vaping products and discouraging youth from vaping,” noted Gregory Conley, president of the American Vaping Association. “Unfortunately, this move has undoubtedly led some adult ex-smokers to relapse and less adult current smokers to attempt to switch over.”
The growth seen at Crosby’s c-stores is “in spite of the (federal) flavor ban in (non-disposable) e-cigs and vape products, along with the addition of the ZYN/Velo products,” Galli added.
The cigarette segment, meanwhile, has been down 10% at Crosby’s c-stores through April, a slump Galli attributed to the purchase age for cigarettes increasing from 18 to 21 on Nov. 1, 2019, in New York state. Shortly thereafter, on Dec. 27, 2019, the FDA officially changed the minimum tobacco purchase age at the federal level from 18 to 21. The new nationwide Tobacco-21 law was effective immediately and applies to all tobacco products, including e-cigarettes and vaping cartridges.
Across the country, Cenex Zip Trip saw a different trajectory at its 36 c-stores in Montana, Wyoming, North Dakota, South Dakota and Minnesota.
“While early March and April saw a small decrease in tobacco sales during the heart of the stay-at-home orders in the states we serve, in the past three weeks, we’ve seen them rise back similar to what we sold during the same time span a year ago,” said Zip Trip Merchandising Manager Jon Fleck.
Montana — where the majority of Zip Trip’s stores are located — is now transitioning into the next phases of loosening stay-at-home restrictions, but during the lockdown, despite decreased customer traffic, the tobacco category held its own, Fleck said.
Fleck noted tobacco companies are offering bigger buydowns and providing them earlier than planned. “With advertising these deals with outdoor signs and matrix reader boards, we have seen some (sales) come back,” Fleck said.
At the end of 2019, a temporary ban on flavored vape products — including menthol — went into effect in the state of Montana. “We did a tremendous business in Montana with flavors prior to the ban,” Fleck said.
The ban on menthol, however, expired in mid-April, and the chain is now bringing in some flavored disposable e-cigs.
Given the Montana flavor ban, Zip Trip has seen a 20% drop in e-cig sales. Although the e-cigs/vaping segment is down significantly because of flavor bans, Fleck noted, “the category is doing well as a ‘comfort product’ along with beer during this pandemic.”
Meanwhile, chew, snuff and cigars are down slightly — “which isn’t bad considering the drop in customer counts (due to the pandemic),” said Fleck. “We categorize tobacco alternatives with these products as well. ZYN, Dryft, etc., have been a pleasant surprise that has picked the overall category up.”
At Zip Trip, tobacco customers are asking for specials, and seeking “the bigger, better deal.” “Similar to beer, cigarettes are comfort products, so while we did a small decrease in business during this time versus the prior year, we attribute most of that to the smoking age increasing to 21 as opposed to COVID-19,” Fleck said.
Meanwhile, in Texas, Irfan Tejani, CEO and president of Tejani Holdings, the parent company of Charge Up c-stores, said COVID-19 had a big impact on tobacco sales.
“Sales were down all across the board by double digits as customers did not know how to react to the entire situation, and then we started to get momentum back,” he said.
Headquartered in Sugar Land, Texas, Charge Up operates 40 c-stores in Texas and Louisiana.
“Louisiana stores specifically had to adapt to operating during a strict lockdown,” Tejani said. Overall, he noted that “despite the ongoing restrictions, the cigarette category remains the highest grosser all across (our stores).”
Smokeless tobacco has been stagnant to growing at Charge Up, depending on the location, while cigarillos are “very strong,” particularly the single sticks, which Tejani noted offer good profit margins. What’s more, he sees cigarillo sales growing — “especially the singles and promo packs like 3-for-1 and 4-for-1 packs,” Tejani said.
Charge Up is also testing the oral nicotine category. Nicotine toothpicks are sold at select stores.
“It’s a special category that doesn’t sell across the board,” he said. “Nicotine gums seem to be doing good where this category is sold.”
Tejani, Fleck and Galli all anticipate strong sales for tobacco for the rest of 2020.
“Tobacco in our New York stores is about to grow. Effective May 18, if your retail location has a pharmacy, you will not be allowed to sell tobacco products,” Galli said. Crosby’s stores in Erie County, N.Y., experienced a lift in their tobacco sales when an identical rule went into effect there around a year ago.
Tejani said he believes the tobacco category will continue to stay strong and consistent over the coming years — unless regulations become even stricter — with e-cigs slowly taking over a bigger portion of the category. Despite ongoing regulations, customer needs drive the market, and customers continue to demand tobacco sales, he pointed out.
“We see tobacco numbers increasing the rest of the year, as many uncertainties lie ahead with COVID-19,” Fleck said. “Once again, for tobacco users, it is a comfort that they rely on during these times.”
One headwind for retailers to watch is potential for tax increases on tobacco products due to the pandemic.
“COVID-19 is creating serious budget issues that we’re only just now starting to calculate. States that had started to grow accustomed to having large surpluses now have huge deficits that may surpass what states dealt with during the 2009 recession,” Conley pointed out. “As a result, tax increases on all tobacco and nicotine products are absolutely going to be considered in dozens of states over the next year. On the plus side for retailers, budget deficits will make it more difficult for state legislators to justify banning flavored vaping or tobacco products due to the tax revenue and jobs they provide.”
Another is how the premarket tobacco authorization (PMTA) will impact the category.
At press time, the new date when (PMTA) applications are due to the FDA is set for Sept. 9, 2020.
“In theory, this would mean that after the September deadline, only products with pending or approved PMTAs before the FDA can continue to be sold by retailers across the U.S. Those selling JUUL, NJOY, Vuse, blu, etc. have little or nothing to worry about in terms of potential dead stock, but some of the more fly-by-night companies that make disposable vaping products seem likely to exit the market in September,” Conley warned.
For a while, the shelf space for vaping products in c-stores seemed to be increasing by the month, he said. But now that some products are likely exiting the market ahead of the PMTA deadline, “the opposite appears to be occurring.”
Conley believes states will begin to police the market more aggressively than the FDA. “We are going to see attempts at the state level to make selling products without a pending or approved PMTA a crime. Of course, this will not stop the black and gray markets, but will just drive them further underground,” he said.