NEW YORK — Despite health and respiratory concerns as well as slowing customer traffic, the tobacco category for convenience stores may prove resilient during the growing coronavirus problem, a New York analyst said, citing no significant change in tobacco sales at the onset of the COVID-19 emergency.
Referring to internal sources, Nik Modi, an analyst with RBC Capital Markets, said that while consumers are not stockpiling, they seem to be buying the same amount of tobacco products with “no dramatic change.”
During a March 23 industry call, Modi said the stable situation is happening even as Richmond, Va.-based Altria has closed manufacturing operations for two weeks due to two employees having tested positive for the virus and its CEO taking a leave for also testing positive. Modi said the company’s position “is not different for Altria prior to COVID,” he said. “People are addicted, and in times of threat, [high stress] and boredom, people tend to drink and smoke.”
On a March 18 earnings call, Brian Hannasch, president and CEO of Laval, Quebec-based Alimentation Couche-Tard, the parent company of Circle K, also cited no significant drop in cigarette sales, even saying that they have seen some signs of stockpiling. “We’ve certainly seen some items of higher demand,” he said. “The staples that people are stocking up on [include] water, tobacco products, even beer.”