Demand for traditional cigarettes continues to soften after tobacco manufacturers recently raised their list prices, according to the latest Nielsen convenience-store report.
The report for the four-week period ending March 27 shows an overall 4.9% industrywide decrease in sales volume for traditional cigarettes.
By comparison, the February report listed a 3.1% decline and the December report a 1% increase.
Analysts have said one development from the COVID-19 pandemic has been smokers increasing their purchases in response to statewide stay-at-home orders.
Also contributing is more states, such as North Carolina, ending statewide curfews and gradually reopening segments of their economies.
The report reflects R.J. Reynolds Tobacco Co. raising its list price for its traditional cigarettes by 13 cents per pack in late January. Altria Group Inc. increased by 14 cents at that time for its Philip Morris USA traditional cigarette brands.
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The list price is what wholesalers pay manufacturers for their traditional cigarette products. The increase typically is passed on to customers at retail.
On Monday, Reynolds raised the list price by another 14 cents per pack.
Philip Morris USA traditional cigarette sales rose 9% for the four-week period, reflecting the list price hike.
Meanwhile, Reynolds had an overall 17% increase. ITG Brands LLC was down 12% for the four-week period.
As of March 27, Philip Morris’ top market share was at 50.7%, down from 52.2% in the previous report. T
Reynolds was at 32.3%, down from 34.4% in the previous report.
ITG was at 7.4%, up from 7.3% in the previous report and unchanged from a year ago. ITG has said its market share is closer to 10%.
E-cig sales down
Sales of electronic cigarettes declined by 1.6% after rising by 17.5% in the previous report, according to Nielsen. They are up 7.5% year over year.
Sales overall had slumped since February 2020, when the Food and Drug Administration implemented its latest round of heightened regulations on the products.
Overall e-cigarette sales-volume growth has declined steadily since Nielsen’s Aug. 10, 2019, report, when it was up 60.2% year over year.
The latest FDA restrictions on the sector debuted on Feb. 6, 2020.
Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings” by Feb. 6, or risk enforcement actions.
Electronic-cigarette manufacturers had to submit by Sept. 9 their premarket tobacco applications in order to stay in the marketplace for at least another 12 months.
Top-selling Juul’s four-week dollar sales have dropped from a 50.2% increase in the Aug. 10, 2019, report to a 1.5% drop in the latest report.
By comparison, Reynolds’ Vuse was up 52.7% in the latest report and No. 3 NJoy down 0.1% and No. 4 Fontem Ventures’ blu eCigs down 20.9%.
Juul’s market share slid from 51.5% to 51.1% in the current report.
Vuse’s market share slipped from 30.5% to 29.9% in the latest report.
NJoy was unchanged at 4.8% in the latest report. Blu eCigs fell from 3.4% to 3.2%.
Goldman Sachs analyst Bonnie Herzog said that NJoy “refutes Nielsen’s data and methodology.”