The future of cigarette displays is uncertain now that tobacco may be more strictly regulated by the Food and Drug Administration. But retailers are still free to merchandise cigars virtually any way they want.
Last month, President Clinton signed an Executive Order that permits the FDA to regulate tobacco as a drug. The goal of the regulation is to prevent teens from smoking. Cigars are not a target because teens typically don't smoke them.
Cigars have been growing in popularity due, in part, to the increase in cigar-friendly restaurants, lounges and hotels; the launch of Cigar Aficionado magazine, and because they represent affluence and success, said Norman Sharp, president of the Cigar Association of America, Washington.
A growing number of supermarket retailers, including Kroger and Big Bear, are beginning to expand their cigar selections, merchandising premium brands in impressive humidors. Demand has been so great that manufacturers have had a tough time supplying enough product.
Dorothy Lane Market, Dayton, Ohio, is working diligently to get premium cigars into its stores, said Tom Winter, director of merchandising. Premium cigars, which are made by hand, consist of long-filler tobacco and retail anywhere from $1 to more than $25 each.
When Dorothy Lane does begin stocking them, Winter expects to draw consumers who are willing to spend more on their cigars than on cigarettes, which will be less accessible when the ruling goes into effect. The cost per pack of cigarettes averages between $2 and $2.50; a premium cigar retails for about $4. "Instead of smoking five [cigarettes], they'd rather smoke one good cigar," he said.
A Columbus, Ohio, Kroger store offers a menu of its cigar varieties. The list is composed of 60 cigars ranging in price from $1.99 for a Cigar Snips to as much as $27.99 for a Pleiades Cutter. Kroger declined to comment on the success of its cigar business.
SN visited two Columbus-area stores that merchandised fine cigars in humidors. Both humidors were placed near the photo and video departments. In one store, the photo and video department was located directly behind the checkout area as part of the Center Store. In the other market, it was found to the right of the front end in a department that was set apart in the perimeter of the store.
Big Bear Stores, Columbus, Ohio, introduced premium cigars into two of its stores earlier this year. A merchandiser there told SN the chain has been very happy with the sales results, and it plans to install two more humidors because of the cigars' popularity.
In select stores, Harris Teeter also uses refrigerated displays to merchandise its cigars. "We have humidors to ensure product integrity; quality is very important," said Ruth Kinzey, corporate communications manager at the Charlotte, N.C.-based chain.
Kinzey anticipates upward movement in the category, particularly as interest in fine tobacco continues.
Sales of large cigars at supermarkets increased 3% to $40.4 million for the year ended March 9, 1996, according to ACNielsen, Schaumburg, Ill. During this same period, the total cigar category in supermarkets generated $89 million in sales, a 5.1% increase.
