Magazine: A long, hot summer…

…and profitable as well, as based on data from Trafik.hu partners we think that tobacco shops realised higher sales than in the summer months of 2014. In the first half of 2015 the sales growth of rolling tobacco drove legal tobacco product sales: according to statistical data from the National Tax and Customs Administration (NAV), this more than 400-ton growth compensated for the decline in cigarette volume sales. Taking a look at the market shares of companies, we can see that JTI became the third biggest player (based on data from tobacco shops operated by Trafik.hu partners, mostly in cities). Philip Morris also kept increasing its market share, mainly to the detriment of British American Tobacco. In certain product categories (e.g. cigarillo) the price competition is getting really fierce. For instance Philip Morris relaunched an already existing cigarillo brand at a stunningly low price, which resulted in the company becoming the second most important actor in the category behind Continental. Several new products appeared in the market in the last few months. As for the value sales of tobacco products, at Trafik.hu partners they were growing faster than the expansion of volume sales. Non-tobacco products’ contribution to the bettering performance of National Tobacco Shops is growing. While back in January 2014 their share was 3.4 percent, by the end of 2014 this proportion was already above 5 percent and kept increasing in 2015. What’s really good about them is that their profit margin is almost twice as big as that of tobacco products. From 1 November BAT and Continental’s National Tobacco Shop Supplier Kft. (ODBE) will be the exclusive tobacco product supplier of all tobacco shops. On the ODBE website it can already be read that the payment deadline will be 14 days for everyone. The website also reveals that at the start and on 1 January of each year every tobacco shop will belong to the highest profit margin category and once they exceed the category ceiling in terms of revenue, they automatically fall into the next profit margin category. This is very good news to the owners of tobacco shops with a lower turnover. Shelf space payment from manufacturers/wholesalers becomes legal again, so tobacco shop owners can also calculate with some additional revenue. n