NEW YORK -- Though 2015 has been a great year so far for cigarette sales, the latest Nielsen data shows volumes have softened slightly as we enter the summer months. Combined c-store and XAOC channel (food, drug and mass) volumes declined 1.4% in the four weeks ending June 13, 2015, down from the 0.4% average of the past three periods. Dollar sales also decelerated during this period, with 1.2% year-over-year growth (versus a 2.3% average dollar sales growth over the last three months).
Still, Cowen Group analyst Vivien Azer said there is still plenty to be optimistic about.
“While volume declines accelerated during the period, declines of 0.4% for the 12-week period remain encouraging,” she wrote in a research note. “While dollar sales growth decelerated sequentially, June 2014 presented the only positive dollar sales comparison in the prior seven four-week periods. Looking ahead the category faces easy (negative) comps for the next four months.”
Of the major manufacturers, Altria Group Inc. enjoyed a flat volume share: 0.5% share gains for its L&M brand were offset by a 0.4% share loss for Marlboro. Reynolds American Inc. saw its volume and dollar share fall (0.2 and 0.3% respectively)—though Azer pointed out that Reynolds’ data “does not account for brands sold and acquired as part of the Lorillard acquisition.”
On a pro forma basis, Azer said Reynolds’ volume share was up 0.4% with its newly acquired Newport brand growing 0.5% during the period.
The other manufacturer involved in the Reynolds-Lorillard merger, Imperial Tobacco Group, reported flat volume and dollar shares. Taking into account the brands it acquired from Reynolds and Lorillard, Imperial’s volume was down 0.2%, with dollar sales decreasing by 0.4%.
Meanwhile, Nielsen reported electronic cigarette dollar sales grew by 19.1% year over year, representing a deceleration from the 12-week trend of 23.3% growth. Volume deceleration was less drastic, with a 54.0% increase year over year, versus the 58.5% growth trend of the past 12 weeks. Sequentially, e-cig dollar sales were down 8.6% and volumes fell 7.1%.
“Category year-over-year growth continues to be fueled by the national launches of Vuse and MarkTen,” Azer said. “Dollar sales and volumes fell 23.3% and 19.0%, respectively, excluding the two brands.”
Vuse and MarkTen, however, both lost share sequentially this period: Vuse’s dollar and volume share decreased (by 2.5 and 2.4% respectively), as did MarkTen’s (down 0.4 and 0.5%).
Imperial’s newly acquired blu eCigs managed to grow its dollar and volume shares, which were up by 1.5% and 1%.
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