Note: 133 PCA retailer members surveyed
What is your top concern as a premium tobacco retailer?
- Significant Impact from Government Regulation and Taxes: A dominant concern among retailers is government overreach through regulations and high taxes. Many retailers feel these factors are directly harming their profitability, with some citing a “taxation out of business” effect and competition against untaxed or lower-taxed online sales.
- Economic Challenges and Inflation Concerns: Retailers report economic instability, rising inflation and increased product costs as key issues affecting consumer purchasing power. This, combined with inflation, has led to higher costs of goods and diminished spending on luxury items, like premium cigars.
- Competition from Online Retailers: Internet retailers are frequently mentioned as a growing threat, especially those operating in low- or no-tax states. Online competition is undercutting brick-and-mortar pricing, making it difficult for physical stores to remain competitive. Some retailers highlight predatory discounting by large online companies that’s putting additional pressure on sales margins.
- Price Increases from Manufacturers and Rising Product Costs: Retailers are experiencing frequent price hikes from manufacturers, which are difficult to pass on to customers without reducing demand. Some suggest manufacturers need to address industry inefficiencies to mitigate these constant price increases, as they are pushing customers away or driving them to cheaper online options.
- Supply Chain and Inventory Challenges: Another notable issue involves maintaining inventory levels, with some items on backorder for extended periods. Retailers emphasize the difficulty of sourcing products reliably, which directly impacts their ability to meet customer demand and manage cash flow effectively.
List the top three most popular cigar brands in the order of their popularity in your store.
- Padrón
- Arturo Fuente
- Perdomo
- Drew Estate
- AJ Fernandez
- Oliva Cigar Co.
- My Father Cigars
- Davidoff
- Rocky Patel
- Plasencia
- La Flor Dominicana (LFD)
- Crowned Heads
- Foundation Cigar Co.
- Macanudo (General Cigar Co.)
- Caldwell Cigars
- Romeo y Julieta (Altadis U.S.A.)
- Ashton
- Tatuaje
- Gurkha
- La Aurora
What digital marketing tools are you using within your business?
- Facebook: 93%
- Instagram: 78%
- Email Marketing: 63%
- SMS: 17%
- Twitter: 14%
- Podcasting: 4%
- Zoom/Microsoft Teams, Video Conferencing: 3%
- Snapchat: 1%
- Clubhouse: 0.75%
Does your business currently have an online store?
- Yes: 26%
- No: 73%
How do you typically find out about new products? (Check all that apply)
- Sales Representatives/Brokers: 86%
- Trade Shows: 53%
- Directly from Manufacturers: 52%
- Online Media and Ratings: 50%
- From Customers: 38%
- Other Media (Print, Podcasts, Video): 23%
- From Other Retailers: 18%
Including yourself, how many employees does your store have?
- 1-5: 49%
- 5-10: 29%
- 10-20: 10%
- Over 20: 10%
How would you describe your store’s 2024 sales performance so far?
- An increase in sales: 58%
- A decrease in sales: 14%
- Stagnant/flat sales: 26%
What is the most popular cigar size sold in your store?
- Toro (6 x 50): 79%
- Robusto (5 x 50): 11%
- Gordo (6 x 60): 8%
- Churchill (7 x 48): 0.75%
- Gordito (4 1/2 x 60): 0.00%
- Corona (5 1/2 x 44): 0.75%
This story first appeared in PCA The Magazine, Volume 4, 2024. To receive a copy of this magazine you must be a current member of PCA. Join or renew today at premiumcigars.org/membership.