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And in Canada, Alimentation Couche-Tard’s Mac’s Convenience Stores reinforced inventory positioning and weeks of supply, according to Peter Chappell, senior category manager. The chain also developed pricing clusters for stores in certain demographic areas.
Meanwhile, Dallas-based 7-Eleven Inc. expanded its sets, keyed in on maintaining contract requirements and staying in stock, said Terry Kailey,[link widoczny dla zalogowanych], category manager. The chain also added tools to help its franchisees manage the category,[link widoczny dla zalogowanych], and encouraged them to focus on taking action on harmful tobacco legislation. “It has never been [a big focus for us], but we’re a huge player in the industry,” he said. “We saw the success we had with the credit card [interchange fee] petition,[link widoczny dla zalogowanych],[link widoczny dla zalogowanych], and we’ll piggyback on that by asking our stores and our customers to get more involved.”
While 2009 was a difficult legislative year for tobacco, retailers voiced concerns of contractual challenges in 2010.
Mandatory automated ordering requirements were an issue for 7-Eleven’s Kailey. “Contracts that reward for margins are restrictive,[link widoczny dla zalogowanych], and out of stock ordering guidelines are so tight and closely managed that it leaves no room for error,” he said.
Mike Zielinski, president and CEO of Royal Buying Group,[link widoczny dla zalogowanych], said there should be more communication between suppliers and retailers. “A contract is [now] a directive from a supplier. If there was education [on the manufacturer's strategy] there would be more acceptance by retailers to drive that strategy down to the consumer,” he said.
Ncapayi is typical of a new, rising breed of cigar smokers,[link widoczny dla zalogowanych], according to Colin Wesley, South Africa’s leading cigar trader, who supplies most tobacconists in the country. These new cigar smokers, he says, are young, black and extremely successful.
“Cigars have always been associated with achievement,” says Wesley. “These young professionals,[link widoczny dla zalogowanych], including many young black businessmen, like the big, expensive brands. Some of them come in and say, ‘Give me your biggest and most expensive cigar.’ They are not shy to spend money.”
The tobacconist argues that this makes sense: “If you think about it, even if they’re spending 250 rand (US$ 35) on a cigar – it may be a lot of money, but it’s not a lot of money for something that’s considered to be (among) the best in the world.”
There’s a “feeling of achievement” in that, says Wesley. “We can’t all drive Rolls Royces and Maseratis and things like that – but a lot of us, at some stage in our lives, will be able to afford one of the best cigars on earth.”
ut Nkosi says the dangers associated with using cigars are unlikely to deter members of South Africa’s black elite from pursuing what he says has become the “latest trend” to enhance their status as “Africa’s rising economic force.”
“All pleasure comes at a cost,” says Nkosi, smiling as he sucks at another of his beloved Montecristo cigars and takes another sip of golden cognac.