10.3 Retail value and volume of the market

Last updated: November 2016 

Suggested citation: Scollo, M, Bayly, M. 10.3 Retail value and volume of the market. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2016. Available from http://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-3-retail-value-and-volume-of-the-market

The three major tobacco companies operating in Australia are not required to report retail sales data to government. Tobacco sales data would be extremely valuable in monitoring trends in tobacco use and in evaluating the effectiveness of tobacco control interventions. Because of the low level of illicit trade in Australia, retail data are likely to provide a reasonably accurate estimate of total tobacco consumption in Australia and would provide an unbiased benchmark against which self-reported tobacco consumption survey data could be evaluated.1 Some sales data are collected by market research companies and are available for purchase.

Despite falling tobacco consumption and lower sales volumes of cigarettes in recent years, the value of tobacco sales has increased over the years, due to price increases caused in part by taxation increases—see Table 10.3.1.

Table 10.3.1
Value and volume of retail sales of tobacco products in Australia, 2012–2015

Source: Euromonitor International, http://www.euromonitor.com/tobacco data provided to Cancer Council Victoria.

10.3.1 Comparison of cigarette sales with sales of other product categories from Australian supermarkets and grocers

In 2014, the total grocery value of cigarettes in Australia was $5.91 billion, representing a total of 9.08 billion cigarettes sold at supermarkets alone. This was a reported increase in value of 6.8% from the previous year. This increase in value is despite a decrease in volume of 4.1%.2 According to Euromonitor, although no precise data are provided, supermarkets gained actual volume share in cigarette in 2009, due to smokers switching from purchasing products from higher-priced convenience stores,3 while there was no real change in supermarket volume share from 2014 to 2015.4 A total of 16.2 billion cigarettes were sold in Australia in 2014,4 suggesting that more than half of all factory-made cigarettes were purchased at supermarkets.

In 2016, consumers spent $7.81 billion on cigarettes in grocery retailers—a reported increase of 6.5% on the previous year.5 In previous years, cigarettes ranked second only to dairy produce in sales value, but in 2015 overtook dairy produce to be the highest-revenue grocery product category (Table 10.3.2).

Table 10.3.2
Ranking by sales value of leading product categories in Australian groceries and supermarkets, 2015

Source: Retail World5

10.3.2 Sales of cigarettes by retail channel type

Euromonitor International publishes data on sales of tobacco products by retail distribution channel. The figures for cigarettes in 2012 to 2015 are set out in Table 10.3.3. Supermarkets have consistently accounted for more than half of cigarette retail sales, with specialist tobacconists being the second most common retail channel at about 17%.

Table 10.3.3
Percentage of sales of cigarettes* from each retail channel, 2012 to 2015

Source: Euromonitor International, http://www.euromonitor.com/tobacco data provided to Cancer Council Victoria.

*Data on sales of smoking tobacco and cigars by retail channel are also available to subscribers to Euromonitor.

References

1. Gartner CE, Chapman SF, Hall WD and Wakefield MA. Why we need tobacco sales data for good tobacco control. Medical Journal of Australia 2010;192(1):3-4. Available from: http://www.mja.com.au/public/issues/192_01_040110/gar11174_fm.html

2. Annual report, Market sizes & shares. Retail World 2014;48:93.

3. Euromonitor International. Tobacco-Australia, September. London: Euromonitor International, 2010, [viewed 30 June 2011] . Available from: http://www.euromonitor.com/tobacco

4. Euromonitor International. Tobacco in Australia. London: Euromonitor International, 2015, [viewed 27 October 2016] . Available from: http://www.euromonitor.com/tobacco

5. Annual report, Market sizes & shares. Retail World 2015;49:54.

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