Premium FMCG products starting to sell in tobacco shops

There was a scissors effect in the relative value sales growth of domestic retail chains and tobacco shops in 2022, when prices began to rise very sharply: tobacco shops didn’t immediately follow suit by pushing prices up, and as a result they were able to take considerable volume sales away from domestic chains. As prices kept rising, tobacco shops slowly started to catch up with the inflation, moving closer to domestic chains with their prices. Thus, the current slowdown is more pronounced in tobacco shops than in domestic chains, which have recently been on an upward trajectory. Tobacco shops haven’t kept pace with the growth of domestic chains: although they are still growing at an average rate, this rate is now below the average of domestic chains. Back in 2022 the average growth of a tobacco shop was 27% for FMCG products, but this year we are talking about only 5%. It is a real surprise that tobacco shops, in addition to serving as a “pub”, now also sell a large number of premium products. This suggests that time is of the essence: the speed of buying does matter and this often convinces consumers not to queue for a few-percent price difference elsewhere. //