Around one-third of cigarettes in Australia are sold through grocery outlets (mainly supermarkets), and about one-fifth through milk bars (Table 14.9).(94)
In 1994, the cigarette market generated more than $5,400 million in sales through all types of grocery outlets (including supermarkets), far outstripping other product categories such as confectionery ($757 million), breakfast cereals ($660 million) and icecream ($470 million).(5) Although cigarettes only take up about 1% of floor space in most supermarkets, they accounted for about 10-12% of turnover in 1993.(95)
Supermarkets are the industry's fastest growing distribution channel, where the competitively priced larger packs are the top selling brands.(7) Between 1992 and 1993, the volume of supermarket sales of cigarettes increased by 13%, and sales value increased by 28% (in part reflecting excise and licence fee increases).(95) Supermarket chains have the capacity to purchase large volumes and then sell at below the recommended retail price, which is seen as by some as a threat to the livelihood of the small tobacconist.(96)