A recent study conducted by the University of Edinburgh has revealed that vapes are four times more profitable for convenience stores compared to tobacco products. The research, which analyzed data from September 2022, found that convenience stores make an average profit of 37.1% for vape products, while tobacco products yield a mere 8.5% profit.
Nine-Fold Increase in Vape Sales
The study also highlighted a significant surge in vape sales over the past three years. The average weekly number of transactions per store that included vapes skyrocketed from 10 in 2019 to 93 in 2022, marking a nine-fold increase. Researchers noted that vape sales have likely continued to grow for small retailers since 2022.
Declining Tobacco Footfall
In contrast to the rise in vape sales, the study found that footfall from tobacco sales has decreased by nearly 40% in small retail outlets compared to less than a decade ago. In 2015, when Action on Smoking and Health (Ash) conducted a similar analysis, 21% of transactions included tobacco. However, this figure dropped to 12.8% in 2022, according to the University of Edinburgh's findings.
This decline in tobacco sales aligns with the overall reduction in smoking prevalence in the UK. Office for National Statistics figures show that 16% of UK adults smoked in 2016, compared to 12% in 2023.
Benefits for Small Retailers and Public Health
The study's authors highlighted the potential benefits for small retailers when existing smokers switch to vaping, emphasizing that tobacco sales are becoming increasingly unimportant for businesses. Professor Jamie Pearce, professor of health geography at the University of Edinburgh, stated, "Our analysis shows that convenience stores now make only 10% of their profits from tobacco and if their customers were buying products other than tobacco stores would benefit from this. Sometimes business and public health interests align – we would all be better off if fewer people bought tobacco."
Call for Retail Licensing Scheme
The profitability of vapes also underscores the need for a retail licensing scheme to crack down on irresponsible sellers and protect legitimate retailers. Ash chief executive Hazel Cheeseman commented, "Responsible retailers who are already profiting from vapes should welcome regulations to improve the market, reduce appeal to children and drive out rogue traders."
Upcoming Legislative Changes
The Tobacco and Vapes Bill, currently making its way through Parliament, aims to prevent anyone born after January 1, 2009, from legally smoking by gradually raising the age at which tobacco can be bought. The legislation also restricts sweet vape flavors and will review the packaging of e-cigarettes to reduce their appeal to children and young people.
Furthermore, the bill includes a total ban on vape advertising and sponsorship, including displays seen by children and young people, such as on buses, in cinemas, and in shop windows, bringing them in line with current tobacco restrictions. Disposable vapes will be banned from June 2025 under separate environmental legislation, while the sale of vapes in vending machines and their free distribution will be stopped.
As the vaping industry continues to evolve and legislation adapts to address public health concerns, convenience stores and small retailers must stay informed about the changing landscape and adapt their business strategies accordingly. The shift towards vaping presents both challenges and opportunities for these businesses, and navigating this new reality will require a keen understanding of consumer trends, regulatory requirements, and the potential impact on public health.
