Convenience-store retailers continue to have a cautious view on the outlook for the tobacco category, according to Goldman Sachs’ fourth-quarter 2024 Nicotine Nuggets Survey.
Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, New York, said survey results show that 26% of respondents believe that the adult tobacco consumer is weaker compared to 48% in the third-quarter 2024 Nicotine Nuggets Survey. Herzog, who spoke at CSP’s 2025 Convenience Retailing University in February in Nashville, Tennessee, shared the latest results of the survey with convenience-store retailers, including downtrading, c-store trips and fuel prices.
Downtrading Pressure Persists
Herzog said results from the survey show that retailers, including convenience-store retailers expect cigarette volumes to continue to remain pressured.
“Price elasticities and downtrading remain top-of-mind concerns,” said Herzog. “The outlook for cigarette volumes for the year is down about 6%.”
Herzog outlined key contributors to cigarette volume declines, including the category out switching to smoke-free alternatives, including illicit flavored disposable e-vapor products.
C-Store Trips
Retailers surveyed confirmed pressure on nicotine customer traffic. Herzog said survey results show that 58% of retailers and wholesalers report c-store trips for tobacco products were lower in fourth-quarter 2024 than third-quarter 2024.
The survey found that 45% of respondents reported lower spending per trip in fourth-quarter 2024, which suggests that consumers may be consolidating purchases to conserve on overall purchases, Herzog said.
Fuel Prices
Turning to fuel prices, Herzog said fuel prices remain off their historical highs but are still a headwind for tobacco consumers.
“If gas prices remain low, we could see a recovery in the convenience-store channel,” she said. “Inside sales for the c-store industry in 2024 were negative. The last time they were negative was more than 20 years ago.”
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