Tobacco display ban in Canada: hitting c-stores
Almost a third of Canada’s convenience stores will close in the next five years as a result of the tobacco display ban, a leading industry expert has warned.
Dave Bryans, president of the Canadian Convenience Stores Association (CCAS), said the ban targeted small businesses disproportionately.
Bryans said tobacco consumption had not gone down as a result and manufacturers are making more money because the sum they previously spent on display and marketing is landing on their bottom line.
"Consumption has gone down nowhere," he said. "Governments don’t lose out because the volumes don’t go down. The manufacturer does not suffer - he makes more money. The only person that suffers is the family-run store."
And, Bryans sounded a wake-up call to convenience retailers in other markets, including the UK, where tobacco display bans have been proposed.
"You’ve got to fight the fight of your lives. If you don’t, like Canada, you will wish you had.
"I have high regard for health advocates but they will bulldoze your store and family business. You can’t allow someone to tell small businesses what is best for their future operation when they don’t understand the small business model."
Bryans told Global Convenience Store Focus, the health lobby had targeted the c-store sector for a quick and easy win.
"Health groups and health advocates are globally much better organised than the convenience sector itself," he said. "That’s why they have targeted c-stores to get what they’ve never got from government before. Government is terrified of health advocates and they’ve been able to talk governments into easy victories."
Bryans said the Canadian convenience market had lost between $70m-$90m of in-store display support due to the tobacco display ban.
"Health groups made a huge error," he said. "They believed that by getting display bans in c-stores across Canada, we wouldn’t have a tobacco industry. But the reverse has happened. Tobacco companies are making more money because the marketing spend has gone directly to their bottom line.
"They did not hurt tobacco companies, they hurt small businesses, which need that money for rent and to reinvent themselves."
Bryans added the relationship between tobacco and small businesses had been lost – tobacco is the biggest driver of footfall in convenience stores, he said.
Health lobbying had also removed smaller cigarette pack sizes, so-called ‘kiddy packs’ from sale in Canada, said Bryans.
"Health groups convinced government that kiddy packs were for youth but there is no study that says by eliminating size or format of tobacco that people buy less."
Bryans said illicit trade in cigarettes was on the increase in Canada and accounted for 50% of sales in the two biggest markets, Quebec and Ontario.
"It’s not for me to say that it’s because of dark markets but convenience stores have lost the display dollar and illicit cigarettes are in growth. Sixty five percent of all cigarettes will be illegal in the next five years."
Bryans said the display ban was disruptive to convenience store operations.
"It will redefine the c-store sector for years to come – it will shape what the front of store looks like, managing inventory and stock rotation and speed of service," he said.
Bryans said the majority of c-store retailers had covered tobacco gantries with screens or flaps. This slowed service and put store staff at risk of attack, he said.
"The minute a retailer turns their back on a violent customer or is distracted, something happens. Health groups don’t care for safety of staff.
"Customers think it’s the stupidest thing they’ve ever seen," he added and, as a result, they are just buying the cheapest products.
"Brand loyalties have gone. Manufacturers have taken the display dollar and marketing funds and used it to fight with each other to get the cheapest product in store. As a result, shoppers fall back on the top three to four brands they can remember."
Bryans urged UK retailers to fight their corner.
"It needs grass roots’ support. Write to your MPs, make them understand the financial implications. Tell 50 customers – the political backlash would be phenomenal. Don’t risk losing your identity and the right to sell legal products."