Sales Restrictions Won't Drop Tobacco Sales Volumes

This was done for Gerson Lehrman Group News and Posted on October 3rd - Ron

Original Article: PM USA v. Pharmacy Smokeout www.cspnet.com (article)

Sales Restrictions Won't Drop Tobacco Sales Volumes

Implications:
1) Legislation Restricts Drug Stores Unfairly
2) Legislation Doesn't Make It Harder to find Cigarettes, just more Inconvenient
3) Smokers will easily adapt to Law; no consumption reduction


Analysis:
The law banning tobacco sales in drug stores unfairly singles out stores containing pharmacy operations as unsuitable venues to purchase tobacco. There is no inference that the drug stores haven't been following the current restrictions on underage sales, so this seems a measure aimed a simply making less convenient to purchase cigarettes, and a punitive measure against smokers with the drugstores overall sales volumes as an innocent casualty of the legislation.As a convenience store consultant to numerous operators, I see at an opportunity for more sales volume. Smokers have been adapting to increasingly restrictive rules on purchasing and using tobacco products, and will adapt in San Francisco again. If they can't purchase cigarettes at one location, they WILL stop at another. Ask any retailer who is "Out-of-Stock" on a popular brand!While I think the Phillip Morris(NYS:MO) position in this case is correct, the overall prevailing sentiment against smoking is driving this legislation.I do not believe there will be an overall drop in in the tobacco company's sales, just who is selling them to the end consumer.
Posted: 10/3/2008 1:06 AM