CATEGORY PERFORMANCE: CIGARETTES

Dollar Sales $5,087,642,000 % Change From Last Year -8.71help fight off lawsuits, while federal and state taxes have boosted the retail price to more than $7 per pack in some parts of the country. Buying patterns have changed as more people head to new sales outlets for their smokes, or give them up altogether. Cigarette outlets, attracting smokers with their low prices and variety, have increased

Dollar Sales $5,087,642,000 % Change From Last Year -8.71

help fight off lawsuits, while federal and state taxes have boosted the retail price to more than $7 per pack in some parts of the country. Buying patterns have changed as more people head to new sales outlets for their smokes, or give them up altogether. Cigarette outlets, attracting smokers with their low prices and variety, have increased sales in recent years and now account for 15% of industry volume. Mail-order and Internet sales also are on the rise as smokers look for cheaper sources.

The decline in supermarket sales has been accelerating during the IRI survey period. Dollar sales in this channel plummeted 8.71% in the 52 weeks ending June 13. This comes on top of calendar 2003 declines of 8.5% on sales of $5.3 billion, and a 2002 drop of 4.3% on sales of $5.8 billion.

Drug stores fared somewhat better, registering only a 0.24% decline to just over $1.5 billion during the 52 weeks ending June 13. Sales dropped 4.8% to nearly $1.4 billion in calendar year 2003, after an increase of 2.3% in calendar year 2002, when sales were just over $1.5 billion.

Within the supermarket channel, single-pack sales, which account for about 66% of all retail sales and are more commonly sold in convenience and drug stores, declined faster than those of multi-pack or carton purchases.

Subcategories: 52-week sales; % change

CIGARETTES/SINGLE PACK: $2,566,384,000; -9.79

CIGARETTES/MULTI-PACK/CARTON: $2,497,865,000; -7.83

Latest 52 weeks ending June 13, 2004.

Dollar Sales Latest 52 Weeks Ended June 13, 2004; % Change; Dollar Sales Calendar Year Ended Dec. 28, 2003; % Change; Dollar Sales Calendar Year Ended Dec. 29, 2002; % Change

Supermarkets: 5,087,642,000; -8.71; $5,263,829,000; -8.52; 5,754,196,000; -4.30

Drug: $1,516,246,000; -0.24; $1,468,767,000 -4.75; $1,541,984,000; 2.26

F/D/MX:$6,682,830,000; -7.33; $6,822,929,000; -8.29; $7,439,608,000; -4.27