Tobacco shops: fewer products, concentrated sales and new growth paths

The geographical distribution of sales is concentrated in the capital: Budapest accounts for only 17% of stores but these generate 32% of total FMCG sales. Even though the annual growth rate is impressive at 2%, the growth is slowing down: while we could see a 6% growth in the first months of 2024, by the end of the year this figure decreased to the national average.

Key categories are the engine of sales, the assortment still needs fine-tuning

The category of crisps generated nearly HUF 2bn sales in six months and now has a market share of almost 3%. More than two-thirds of tobacco shop customers purchase FMCG products, even if they don’t buy tobacco products – in some counties the proportion of tobacco-free purchases reaches 36%. Seven key categories account for 87% of total FMCG sales, with alcoholic drinks at the top with a 51% share. There is still significant potential in optimising the product range: half of sales are generated by 8% of the product portfolio, while 90% are generated by only 23%. The rise of premium products is also an important phenomenon: sales of “price-sensitive” products dropped 14% and mid-range product sales were down 24%, but the premium segment grew by nearly 40% in one year. In this channel the future growth of the FMCG segment can be driven by new products, promotions and price positioning.