NEW YORK -- Cigarette dollar sales were up by 1.1% in the past four weeks, riding on a 3.1% price increase, according to Nielsen data.
The positive, all-channels sales data is good news, coming against “marginally worse” volumes that showed a 2% drop in the same four-week period (ending Aug. 13, 2016), wrote Bonnie Herzog, managing director of beverage, tobacco and convenience-store research for Wells Fargo Securities, New York, in her recent newsletter. New York-based Nielsen’s 12-week volume analysis showed a drop of 1.7%.
“But we see room for improvement given macro tailwinds supporting a strong adult tobacco consumer,” she wrote.
Summarizing activity from the major manufacturers, she said Winston-Salem, N.C.-based Reynolds American’s cigarette-dollar sales continue to rise, up 1.5%, with the Newport brand giving a strong showing at an increase of 3.8%. Reynolds' cigarette sales outpaced the industry’s 1.1% growth, she said. Natural American Spirit volumes decelerated further on a sequential basis, but they were still up a healthy 16.8%, with relatively stable pricing (up 2.5%). Camel dollar sales decreased 1.8% on a negative 4.2% unit volume.
Altria Group, Richmond, Va., increased its cigarette dollar sales by 0.9%, driven by the strength of Marlboro, as its price (at an increase of 2.5%) drove its dollar sales up 0.7%. Soft volumes offset Marlboro’s momentum, falling 1.5% in the recent four-week timeframe vs. 1.4% over the past 12 weeks.
ITG dollar sales are improving but remain under pressure, Herzog said. Greensboro, N.C.-based ITG’s cigarette dollar sales were down but improved slightly, dropping 1.5% (1.6% for the 12-week period); the drop was driven by substantial volume declines (4.7%) but offset by an increase of 3.4% in pricing.