Retailers who sell cigarettes are frequently small businesses with cigarette sales representing a large part of their income. Being able to display products is essential so that retailers can present their range of available products to adult smokers.
Retailers have expressed serious concern over the consequences of a point of sales display ban.
Loss of revenue - Cost Implications - Inconvenience - Security
After implementation of a display ban there can be a significant shift of volume from small retailers to larger retailers and from legal trade to the illegal trade. Furthermore, price becomes the main form of competition among brands, also representing a loss in revenue to retailers.
“Tobacco products can represent something like 30 per cent of a store's sales and that's an average amount… The problem we see is that tobacco display bans in small outlets will cause a transfer of business to supermarkets…this will not reduce youth smoking. It will affect our retailers.”
David Killeen, AACS, ABC News in Australia, May 2008
"A ban on tobacco displays will put many independent shopkeepers out of business. That's just what has happened in Canada where 23 convenience stores in Ontario and 12 in Quebec closed every week after bans were introduced there”.
John McKeown, Northern Ireland spokesman, Tobacco Retailers Alliance, Tobacco display ban threatens corner shops, The Press Association, 17 June 2009
“It is the state that controls everything here and which is putting its own citizens out of business.”
Norwegian Retailer, Gjengangeren, January18, 2010.
The display of tobacco products represents a considerable investment for retailers. Complying with a display ban means that the investment is lost and brings with it an additional installation cost for complying with new regulations.
“Our estimate is that the cost of installation for an average store would be a minimum of £1,850, but could reach as much as £5,000. These compliance costs are significant and will harm retailers of all sizes”.
Association of Convenience Stores (ACS) in the UK.
"This is potentially a massive financial burden for small retailers to carry when we consider there is no international evidence that restricting the display of cigarettes actually reduces the uptake of smoking."
Australian Retailers Association (ARA) Executive Director Richard Evans
“Since the bans were introduced in 2008, 1875 stores have closed and costs have increased for retailers while losing revenue year-on-year.”
Dave Bryans, Executive Director of the Canadian Association of Convenience Stores, addressing Australian Retailers, January 2010.
Many retailers say that a display ban complicates the experience for both retailer and customer because the time taken to serve each customer increases significantly.
"The sale of cigarettes and other tobacco products is a legal activity and both retailers and adult consumers have a right to carry out transactions without any unnecessary inconvenience”
UK Department of Health DH Consultation on the draft regulations under powers contained in the Tobacco Advertising & Promotion – August 2002
“In an indicative regulatory cost analysis by Deloitte, it was also found that a Victorian retail display ban would result in recurring costs of $116 million. This translates into the average ‘mum and dad’ convenience store having to bear ongoing costs of up to $17,560 per year, due to deterioration in customer transaction and service times."
Australian Retailers Association (ARA) Executive Director Russell Zimmerman
"It's pretty absurd that a person who comes here and buys cigarettes is not allowed to look at them for more than 30 seconds. I've worked here long enough to know which door each package is behind, but not everyone knows, so it may take longer than 30 seconds".
gas station employee in Norway, Gjengangeren, 22 December 2009.
Some retailers have expressed concern for their safety as a result of having to spend more time retrieving the product when it is placed below the counter or inside a cabinet as that represents an additional distraction for staff.
“This slowed service and put store staff at risk of attack…The minute a retailer turns their back on a violent customer or is distracted, something happens.”
Dave Bryans, President of the Canadian Convenience Stores Association
“Since the display ban here in Ireland, I’ve been approached numerous times by shady looking characters asking me if I would like to stock his illegal cigarettes. I fear that one day the approach will be a lot more menacing.”
Source: Irish retailer, 2009
Reports and Studies
Deloitte Study – 2009
Australian Association of Convenience Stores
Indicative regulatory cost analysis of proposed tobacco retail display ban for convenience store operators in New South Wales, Victoria and Western Australia.
The survey looks at the potential economic impacts of a tobacco product display ban for retailers highlighting increased transaction times, a channel shift from small to larger retailers and increased operating costs which could be as high as AUS$19,560 per store.
Click here for the full report
Press Release
In Ireland a tobacco retailer in conjunction with a tobacco manufacturer have started legal proceedings against the government to seek to overturn the ban.
Click here for press release