Retail volume sales decreased strongly between 2016 and 2020, driven by an overall decline in smoking prevalence, as well as a drop in the number of sticks smoked. This was due mainly to rising health awareness, which results in more people trying to quit smoking altogether or at least to smoke less.
Retail volume sales of cigarettes were further affected by the strong pressure on disposable incomes as a result of the residual economic effects of the COVID-19 pandemic. As one of the most expensive options within tobacco, part of the losses in sales of cigarettes is due to migration to illicit trade products, which remains very high in Greece.
That the residual pressure on disposable incomes continued to affect the performance of cigarettes was evident in the further increase in retail volume share for larger packs (20+) in 2021. Larger packs leverage value for money positioning, with a lower price per stick.
Migration to other categories is set to continue, with the rise of heated tobacco and e-vapour products taking a heavy toll on cigarettes’ performance. The vaping and heated tobacco populations are anticipated to grow over the forecast period, while overall smoking prevalence is expected to decrease, translating into a decline in cigarettes’ retail volume share in tobacco in Greece.
Notwithstanding the projected poor performance of cigarettes, compared to other categories, the competitive landscape is set to remain very fragmented, with over 30 brands competing for a slice of a shrinking pie. Companies seem uninterested in discontinuing products in fear of the impact that this may have upon their overall share of sales within the category.
Amidst the losses anticipated in retail volume sales of cigarettes, companies aim to refrain from price hikes; despite increasing operating costs due to high inflation and rising energy prices, etc, which squeeze profit margins. Companies are expected to strongly prioritise volume over value, focusing on retaining volume sales and seeking ways to make cigarettes more affordable to price-sensitive smokers, such as via the launch of 100s and larger pack sizes.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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