Sheetz's Tobacco Promise

Pa. chain "calls out" cigarette companies on price hikes are FET increase kicks in

ALTOONA, Pa. -- With the increase in the federal excise tax on most tobacco products officially kicking in today, Sheetz Convenience Stores is launching a marketing campaign that it hopes will keep tobacco consumers visiting its stores, guaranteeing the lowest allowed price on cigarettes in several of the states in which it operates.

"Pennsylvania set a state minimum on cigarette prices," said Louie Sheetz, executive vice president, marketing for Sheetz Inc., in a press release, "and if we sold them for less than the state minimum, I'd end up in jail. However, I can promise [image-nocss] you that Sheetz customers in Pennsylvania won't pay a penny more than the state minimum."

The company is making a similar promise in Ohio, Maryland and West Virginia.

Sheetz also has been alerting its customers that the tobacco companies raised prices more than three weeks earlier than the April 1 scheduled increase in the federal excise tax. More than 70% of respondents to a Kraft/CSP Daily News Poll yesterday said they had increased their prices ahead of the April 1 date.

The tax is increasing as part of Congress' funding plan for State Children's Health Insurance Program (SCHIP). This program helps states provide health care to more than 5 million of the nation's uninsured children through a matching funds program.

"The cigarette manufacturers think they're pulling an April Fools' trick on their customers," said Sheetz. "Consumers were expecting an increase April 1, but the tobacco companies actually raised the prices as early as March 11, which forced us to raise our retail prices. Now, they're just pocketing that extra money. Add to that the fact that in the past few weeks, they've also raised their own prices, and so now they're taking in an extra seven bucks per carton. In my book, that's more than an April Fools' trick; that's just wrong."

Sheetz held off on passing on the increases as long as possible because it wanted to protect consumers. Stores posted notices at the counter explaining that manufacturers took the increases early. Sheetz said he sympathizes with customers who express grief and anger when confronted with the higher prices.

"I'm angry, too," said Sheetz. "It was unnecessary for the cigarette manufacturers to raise prices early, and I'm calling them out on it. At least we're able to guarantee our customers the lowest price on cigarettes in Pennsylvania. That will help."

Altoona, Pa.-based Sheetz Inc. operates more than 350 convenience locations throughout Pennsylvania, West Virginia, Maryland, Virginia, Ohio and North Carolina.

Meanwhile in Kentucky, smokers were stocking up this week in advance of two new excise taxes taking effect today, according to a report from WFIE-TV. One Kentucky tobacco shop on the north side of the Ohio is seeing a surge of shoppers.

"We've been really, really busy," Amy Schiff, a manager at Marina Pointe Tobacco, told the news station. "Just slammed. There is constantly a line of people stocking up, trying to get the best deal."

Marina Pointe smokers were trying to stock up on their favorite tobacco products before today's big tobacco tax hike.

"We've seen Marlboros go from $28.99 to $44.99 [a carton]," Schiff said. "That's quite a bit of difference."

The federal tax of cigarettes today rises from 62-cents per pack to $1.01. Add to that Kentucky's tax increase, also happening today, originally just 30 cents per pack and now doubling to 60 cents.

It's something each Marina Pointe customer is warned about as they make their purchase at the counter but something no smoker is happy with. Each employee says it's something they've all heard about.

"That they're going to quit smoking and that this will be there last carton. They say that but they always come back," Schiff said.

For more about SCHIP and its impact on c-stores, see the April issue of CSP Magazine.