Tobacco Pricing

A Guide to Tobacco Pricing

Improving performance in the most challenging convenience store category

Pricing tobacco in a convenience chain means satisfying four parties at once. State and local regulators set a floor that If you price tobacco for a convenience chain, you already know the job is more complex than it is in other categories.

Cigarette volume falls a little further every year, while state and local rules change on schedules you cannot always plan around. Meanwhile, tobacco shoppers are more price sensitive than they have been in a decade. To boot, the products on your backbar keep turning over.

One tobacco pricing manager at a top 20 convenience retailer put the cost of getting it wrong plainly: “My price was off by one penny, and I lost a $100,000 buydown.”

This guide walks through the “four bosses of tobacco pricing,” and gives you a strategy for each.