Tobacco

Retailers Shed Light on Managing Backbar

TPE panel addresses blocking and tackling within the tobacco category
Photograph by CSP Staff

LAS VEGAS Covering everything from SKU management to handling vaping and other product innovations, convenience retailers on an educational panel at the recent Tobacco Plus Expo (TPE) conference and trade show provided insights on how to optimize one of the c-store channel’s core categories.

The trick with tobacco is to focus on top-selling brands and “work backwards” to eliminate slow-moving SKUs and limited-time-offer (LTO) items that have lost their luster, said John Zikias, who retired last fall from Holmes Oil Co., a 26-store chain based in Chapel Hill, N.C. Now president of his own consultancy, JAZ Enterprises, Scottsdale, Ariz., Zikias said he would review seasonal and LTO cigars every two months, because consumers were fickle and would often allow a hot product to suddenly go cold. He also advised retailers to rely on suppliers for software tools and data to help identify hot-selling items.

Another major tip the retailer panel offered was participating in major manufacturers' loyalty programs. Bill McCloskey, director of operations for Rmarts, Deerfield, Ill., said he recently began multipack discounts from Richmond, Va.-based Altria Group on Marlboro cigarettes, which led to significant lifts in the first four weeks of his participation.

“Loyalty is a huge component,” McCloskey said, adding that he is anticipating other, similar manufacturer opportunities in the coming quarter.

Regarding innovation and the emerging vaping category, Paul Casadont, president of Pleasanton, Calif.-based ExtraMile Convenience Stores, the 800-store joint-venture partnership between Chevron and one of its wholesale distributors, Meridian, Idaho-based Jacksons Food Stores, said the company had undergone resets to better merchandise the vaping category. The chain began working four years ago with San Francisco-based Juul Labs and its popular e-cigarettes. “It’s been a great product for us,” Casadont said.

While enthusiastic about vaping, Casadont had a cautionary perspective on cannabidiols, or CBDs. The medicinal remedies that were causing quite a stir among c-store retailers generally and on the TPE trade-show floor still carry with them product-quality and legal issues that need to settle out, Casadont said.

“There’s too much uncertainty,” Casadont said of CBDs, which contain nonpsychoactive properties from cannabis and hemp plants. “We’ll take a back seat on this.”

The TPE convention and trade show ran Feb. 11-13 at the Las Vegas Convention Center and featured exhibitors ranging from premium-cigar makers to vaping and CBD manufacturers.

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