Cigarette Ban May Inspire New Consumer Habit

Cigarette Ban May Inspire New Consumer Habit

San Francisco drug stores may soon be scratched from the list of feasible destinations for residents seeking a tobacco fix.

Last week, a law proposing the ban of tobacco at pharmacies was approved in an 8-3 vote by the city's board of supervisors. If approved during a second voting session, cigarettes in the channel will go the way of the city's plastic bags and bottled water purchased with city funds, becoming obsolete on Oct. 1.

Nathan Ballard, a spokesman for the mayor's office, summed up the impetus behind the measure best when he told reporters, “A pharmacy should be a place you go to get better, not a place you go to get cancer.”

Unlike similar proposals introduced in states like New York, the ban would not include supermarkets with pharmacies. In fact, passage of the law may serve as competitive incentive for supermarkets to continue carrying cigarettes.

Although grocers like Wegmans, Andronico's Market (which has one location in San Francisco) and Dorothy Lane Market acted in the interest of consumers' health when phasing out the sale of tobacco earlier this year, it seems that outside factors — like drug store erosion of their category share — lent themselves to those decisions.

Unit sales of cigarettes in the food channel fell 3.7% during the 52 weeks ending June 15, while volume climbed 8.7% in the drug channel, according to IRI.

But these numbers only tell part of the story. A similar trend is surfacing in the frozen entree, cold cereal, salty snacks, ice cream and toilet tissue categories.

Sales of frozen dinners, for instance, dropped 2.4% in supermarkets and rose a whopping 12.1% in the drug channel, during the same time period. Although drug store food volume pales in comparison to that of the supermarket channel, industry observers note that a sizeable shift is occurring. And whether they're stopping in for smokes or to fill a prescription, more and more consumables are making their way into shoppers' baskets.

A portion is attributable to the greater availability of food items at drug stores, Sheila McCusker, editor of IRI's Times & Trends report, recently told me. Drug stores are merchandising a wider range of national-brand and private-label meal solutions, snacks and beverages, in the hopes of cashing in on incremental sales opportunities.

In recent months, soaring gas prices have also helped the likes of CVS, Walgreens and Rite Aid secure their position as a destination for large fill-in trips.

Basket sizes during these trips, rather than the number of actual fill-in trips to drug stores, have experienced a particularly substantial increase.

“Consumers are saying I'll make the trip to supercenters for pantry-stocking trips, but I can't afford the gas to go back frequently so I'll make my fill-in trips locally,” McCusker said. “Drug stores are benefiting from that.”

The availability of cigarettes could play a roll in determining the destination of these fill-in trips, especially as gas-conserving shoppers fill-up less frequently at places like c-stores where cigarettes have traditionally been the second-best-selling item.