Bill Seeks To Snuff Cigarette Sales

JULIE GALLAGHER

ALBANY, N.Y. — A bill seeking to extinguish sales of tobacco products in New York supermarkets that contain pharmacies was introduced by state Assemblyman Sam Hoyt, D-Buffalo, earlier this month. The proposal came one week after Rochester, N.Y.-based Wegmans announced its plans to snuff its “very profitable” tobacco category chainwide Feb. 10.

“In light of the overwhelming evidence of the harmful nature of cigarette smoking on one's health and the astronomical public health costs posed by tobacco products, it is contradictory and counterintuitive to sell such products in an establishment whose purpose is to provide remedies to health problems,” said Hoyt in a statement.

The bill also seeks to ban tobacco sales in stand-alone pharmacies. Stores that stock only non-prescription medications would not be affected.

In letters addressed to their respective chief executive officers, Hoyt sought the cooperation of Wal-Mart Stores, Bentonville, Ark., and Tops Markets, Buffalo, to “set an example for the rest of the retail market by ending the sale of tobacco products at retail stores that contain pharmacies.”

The retailers didn't return SN's request for comment.

In his letters, Hoyt cited examples of Wal-Mart banning the sale of all tobacco products in its Canadian stores in 1994 and Target Stores' adoption of a similar policy in 1996.

“Tobacco is still a legal product in New York state, and what's good for one in retail, whether it's groceries or automobiles, may not be good for another,” said Ted Potrikus, executive vice president of the Retail Council of New York.

Next month, Wegmans will join Whole Foods Market, Trader Joe's and Publix's GreenWise Market stores, which also don't sell cigarettes. Wegmans committed earlier this month to ordering no new tobacco products. Its Woodbridge, N.J., location is on its way to selling the last of its cigarette inventory. “There is hardly anything left, we've got very limited amounts,” noted a store associate.

Signs posted at the 71-store chain's customer service counters — where it sells cigarettes and other tobacco products from a locked case — let shoppers know that Wegmans came to its conclusion after considering these products' effect on shoppers' health.

Wegmans' probity-before-profits approach will go a long way toward reinforcing its health and wellness positioning, noted Jim Hertel, managing partner at Willard Bishop, Barrington, Ill.

“It's difficult to be an authentic provider of health and wellness and sell cigarettes at the same time,” he said. “It's also a bit inconsistent to be enhancing your workforce's overall prospects for living active lives while participating in the [tobacco] industry.”

Ted Taft, managing director of Meridian Consulting Group, Westport, Conn., observed that Wegmans' decision is part of a larger market shift.

“There is such a sensitivity these days toward health and wellness and merchandising the total store,” he said. “If you were to back up 10 years, retailers were more concerned with cutting costs, but now they're trying to brand and differentiate themselves. If other retailers see that Wegmans is being more sensitive to cigarettes, they may follow.”

Still, many rely on the category's margins, especially since they are five times higher than that of the average supermarket category. Grocers bring in about $150 in tobacco profit per square foot per year, compared with an average of $30 elsewhere in the store, said Taft.

Supermarkets are also rewarded with promotional allowances from tobacco companies. Philip Morris offers financial incentives to retailers based on volume sold, and commitments to participate in pricing promotions and in-stock guarantees, said Bill Phelps, spokesman for the Richmond, Va.-based manufacturer.

“There are a lot of promotional monies offered by cigarette suppliers, but [Wegmans] never really partook in any of those programs,” said Hertel. “I don't know that they were ever particularly committed to the category like some convenience stores have been.”

Supermarket sales of cigarettes are on the wane. Dollar sales in the channel reached $4.9 billion, down 2.73% during the 52 weeks that ended Dec. 30, while unit sales dropped 5.28% to 761.9 million packs.

Although doing so in the past may have been viewed as hypocritical, Wegmans' decision may give way to opportunities for promoting smoking cessation aids. Consumers are expected to purchase more than $61 million in anti-smoking aids this month alone, according to the Nielsen Co.