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THE TOBACCO INDUSTRY AND THE RETAIL ENVIRONMENT

Tobacco companies rely on the retail environment to reach both current and future customers by advertising their products and normalizing the presence of tobacco products in everyday life. The tobacco industry spends nearly $1 million per hour on marketing tobacco products in the retail environment, and it works - when discounts and promotions are advertised in stores, tobacco product sales go up by as much as 30%.

Learn more about the tobacco retail environment in the sections below or read the full report.

Regulating the tobacco retail environment

Strong restrictions on advertising, discounting, promoting, and selling tobacco in the retail environment are critical to prevent initiation, encourage quitting, protect young people, and mitigate the impact of tobacco marketing for groups who have been disproportionately targeted. See below for recommendations for policies to create a safer retail environment. 

For a comprehensive list of all such policies, please refer to the full report

Federal action needed to regulate the tobacco retail environment

The Food and Drug Administration (FDA) must use all its powers to enforce restrictions in the retail environment including:

  • Removing all tobacco products that have not submitted premarket review applications or otherwise are illegally on the market. FDA should prioritize enforcement against products that appeal to youth and have the highest addiction potential – whether those are products with high nicotine concentrations or other design features that are appealing to youth.

  • Requiring that all tobacco products be kept behind the counter

This is not a comprehensive list. For more policy recommendations, read our full report.

Woman purchasing items at a convenience store counter. Tobacco products are visible behind the counter.

State and local actions needed to regulate the retail environment

As sales of flavored e-cigarettes continue to rise, individual states have started to take action to address the sale of flavored products, and these policies have proven to be highly successful.

State and local governments can regulate the tobacco retail environment and protect their citizens by: 

  • Requiring a license for tobacco retailers
  • Requiring tobacco retailers to carry and offer for sale at least one type of nicotine replacement therapy drug, device, or combination product that has been approved by the FDA for cessation of tobacco use
  • Prohibiting the sale of tobacco products with high nicotine content
  • Limiting the sales of all tobacco products to adult-only stores 
  • Prohibiting couponing and other discounting tactics 
  • Setting minimum prices for tobacco products

This is not a comprehensive list. For more policy recommendations, read our full report.

Read more about state and local actions needed

Retailer responsibility

Retailers that sell tobacco products can be responsible actors by:

  • Selling only those tobacco products that have received marketing authorization by the FDA
  • Displaying signage regarding tobacco and nicotine cessation resources

  • Carrying and offering for sale at least one type of nicotine replacement therapy 

  • Requiring all tobacco products be kept out of view or behind the counter

  • Confining all tobacco advertising inside the store to only the area where the tobacco products are sold

This is not a comprehensive list. For more policy recommendations, read our full report.

A smoke shop

The impact of tobacco marketing in the retail environment

Tobacco marketing in the retail environment is associated with impulse purchases of tobacco products. Cigarette displays at the point-of-sale tempt smokers to buy tobacco, even among customers not intending to do so and smokers trying to quit. According to a study from 2016, higher exposure to in-store advertising and price promotion at the point-of-sale was associated with a lower probability of successful quitting among adult smokers.

The tobacco industry spent almost $9.5 billion marketing its cigarette, smokeless tobacco, and e-cigarette products in 2021, the most recent year with data for all three categories. Almost $9.1 billion (or 95.6%) of that was spent on marketing in the retail environment that year, amounting to over $1 million every hour. The reason the tobacco industry invests in the retail environment is simple: it works. When discounts and promotions are advertised in stores, tobacco product sales go up by as much as 30%.

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Disparities in the tobacco retail environment

Tobacco retailers are often more heavily populated in areas with a greater number of minority and low-income residents. A study of current adult smokers found that those with incomes below the poverty level were more than twice as likely to purchase a tobacco product due to a special price promotion, and Black or Hispanic individuals have higher odds of reporting exposure to tobacco advertising compared to White people. This phenomenon is not limited to cigarettes – geographic, socioeconomic, and racial and ethnic disparities also exist for exposure to e-cigarette advertising in the retail environment.

Black D.C. neighborhoods have greater marketing for flavored tobacco products, including cigars

The figures above from 2017 show that as the proportion of Black residents in Washington, D.C. neighborhoods increases, the predicted price per cigarillo decreases. Figure (a) shows the quartile distribution of the Black population in Washington, D.C., with darker blue representing a greater number of Black residents. Figure (b) shows the prediction map of price per cigarillo with darker colors representing lower prices. 

Young adults smiling and talking

Youth and the tobacco retail environment

Youth are especially affected by tobacco marketing in the retail environment. Advertising and promotional efforts by tobacco companies influence the initiation and progression of tobacco use among young people. Studies show that tobacco use is associated with both exposure to retail advertising and relatively easy in-store access to tobacco products. Frequent exposure to tobacco product advertising and retail marketing over time normalizes tobacco and smoking for youth and makes them more likely to smoke.

The retail environment also has a great impact on youth use of e-cigarettes. Exposure to e-cigarette ads in the retail environment is associated with susceptibility among youth, higher likelihood of current e-cigarette use, and the perception of reduced harmfulness of e-cigarettes compared to regular cigarettes. Exposure and attention to the tobacco power wall, the area behind the cash register where tobacco advertising is concentrated and tobacco products are displayed, is associated with higher odds of using both cigarettes and e-cigarettes in the future.

New study: 43% of underage e-cigarette users report getting their e-cigarettes from retail sources

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Licensing and retailer density

Retailer density is an important predictor of youth and young adult smoking. As the number of tobacco retailers increase, so does exposure to tobacco advertising and promotion. Convenience stores, where 70% of youth shop at least once a week, have more tobacco marketing and sell more cigarettes than any other type of retail store. Cigarette sales account for one-third of all purchases at convenience stores.

As of 2022, an estimated 380,000 retailers sell tobacco products in the U.S. This number is equivalent to 25 tobacco retailers for every Starbucks or 28 tobacco retailers for every McDonalds. According to data from 2016, an estimated 48% were convenience stores (with and without gas), 25% were supermarkets, 13% were off-premise liquor stores, 7% were pharmacies, 4% were tobacco shops, and 3% were discount department stores, warehouse stores, and newsstands.

Stop & Shop halts sales of all tobacco products, encourages people to quit

An image of a dollar bill and cigarettes

Price

Tobacco companies lower the prices of their products through tactics such as multipack discounts (e.g. buy-two-get-one-free), price discounts (e.g. $2.50 off one pack), and couponing. Tobacco product coupons are received more often by individuals of lower educational attainment, higher intensity tobacco users, and people who identify as sexual and gender minorities. Tobacco companies also target female, low socioeconomic status, and BIPOC customers with coupons. These price-reducing promotions also mitigate the impact of tax increases.

Keeping the price of tobacco products high is a great benefit to public health. In fact, a CDC study found that a $10 per pack retail price combined with eliminating discounts could result in almost 638,000 fewer youth smokers, almost 4.2 million fewer young adult smokers, and more than 7.7 million fewer adult smokers aged 26 years and older, just one year after implementation.

Majority of adults, and at least a quarter of current smokers, strongly favor efforts to raise tobacco prices

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Cigars Retail Advertising

In-store promotion and placement

The tobacco industry promotes its products at the point-of-sale through displays and advertisements, including through the tobacco power wall, an area behind the cash register where tobacco products are concentrated. In 2014, the tobacco industry spent over $270 million dollars promoting its products at the point-of-sale.

Tobacco companies provide retailers with incentives for advertising their products. Most retail stores participate in at least one cigarette company incentive program and nearly four out of five participating retailers report that the tobacco company supervises the location of marketing materials in their stores.

Restricting the promotion of tobacco products at the point-of-sale would benefit public health. A modelling study suggests that restricting tobacco product displays and advertisements in the retail environment in the U.S. would reduce smoking prevalence by approximately 16% by the year 2065, thus preventing about 630,000 smoking-attributable deaths, 215,000 low birth weight births, 140,000 preterm births, and 1,900 infant deaths from SIDS.

Colorful and close to candy: Surveying how the tobacco industry markets flavored products in stores

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Read more about our policy leadership for more information on how we are driving policy change to advance public health.