The national chain Family Dollar is getting into tobacco in a big way, CSPnet.com reports. The chain, with 7,200 stores nationwide, is introducing a four-foot tobacco display to 6,000 of its stores by the end of the year. CEO Howard Levine said tobacco is more frequently purchased, and drives substantially more consumer trips to the store, than beer and wine.
Rival chain Dollar General has not announced sales of tobacco, but it has been testing sales of tobacco since late last year, the article notes.
According to Family Dollar, more than one-third of their heavy customers smoke, compared with the national average of less than 20 percent, and these customers make more trips to the store. The chain also found that 60 percent of shopping baskets that included cigarettes also have additional items. The average shopping basket with cigarettes contains $17 worth of items, compared to $13 for baskets without cigarettes.
The company, which reported $8.5 billion in sales last year, does not sell cartons of cigarettes or moist smokeless tobacco.
Lou Maiellano, partner in TAZ Marketing & Consulting Group, a tobacco retail consultancy, said Family Dollar’s gain will be drug stores’ loss. “The person going to Family Dollar buys cigarettes there but typically bought them at Walgreens on the corner, or at the tobacco shop. The pie is just being re-sorted,” he said.