Polyusage, or cigarette consumers consuming other nicotine products, is increasing as cigarette volume is decreasing, Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, New York, told a room full of convenience-store retailers and others who sell tobacco products at CSP’s Convenience Retailing University (CRU). The event took place Feb. 24-26 in Nashville, Tennessee.
In her presentation, Herzog offered a detailed outline of the latest results from Goldman Sachs’ fourth-quarter 2024 Nicotine Nuggets survey. The survey represents about 50,000 retail locations across the United States, including convenience stores.
Herzog said results from the survey show that retailers, including convenience-store retailers expect cigarette volumes to continue to remain pressured.
“The outlook for cigarette volumes for the year is down about 6%,” Herzog said.
Herzog shared how consumers are continuing to grapple with inflation. “Consumers are shifting to packs from cartons because clearly consumers don’t have enough money in their back pocket to afford a carton,” she said.
She mentioned reduced tobacco purchase frequency also played a role in retailers’ and wholesalers’ cautious outlook for the cigarette category. Almost 60% of the retailers from the survey reported that the nicotine customer traffic is pressured, she said.
“Wholesalers did highlight that c-store trips for tobacco and nicotine products were lower in fourth-quarter 2024 compared to third-quarter 2024,” she said.
Herzog noted that almost half of the retailers surveyed said that spending per trip in fourth-quarter 2024 was lower. She said that this could be the result of consumers consolidating purchases to conserve or not frequenting the c-store as much as they used to.
Turning to tobacco category trends, Herzog said that manufacturers retain pricing power, but not as strong as before and that shelf space is going to the fast- growing nicotine segments, including nicotine pouches.
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