Magazine: The changing face of retail

Zoltán Tóth
managing partner
MindZ

Trafik.hu coordinates the purchasing and sales work of 100 National Tobacco Shops. Data from the company reveals that these units are playing an ever-bigger role in Hungary’s FMCG retail. According to the Central Statistical Office (KSH), grocery sales were up 6.6 percent in the first half of 2019, and sales by discounters augmented by 12-13 percent, but National Tobacco Shops’ sales performance surged by 22 percent.

The current system of tobacco shops underwent many changes since 2013 and if the parliament gives a green light to the planned new law, rules will be even stricter for selling tobacco products. One of the most important new requirements will have to do with the number of concessions: In the present system there is National Tobacco Shop for every 2,000 inhabitants, but if the new law is given the green light, there will be one concession for every 4,000 consumers only.

Meanwhile tobacco shops have become places for convenience shopping. FMCG products already make up for 10-15 percent of total sales in these retail units. Half of sales are generated by alcoholic drinks, 30-35 percent come from mineral water, soft drinks and energy drinks. Since these products can be sold with a 25-30 percent profit margin, tobacco shop owners are focusing more and more on these categories.

They are using successful digital POS advertising tools like TrafikTV that is operated by DigInStore Zrt. We can already see newly launched successful programmes by tobacco shops such as Pannon Kávé Kft., Trafik Kávé’s franchise system or the joint initiative of V-tel and NDCom Kft. for selling mobile top-up cards. National Tobacco Shop owners are learning fast and working hard to be successful.. //