As in cigarettes, following high retail volume and current value growth in 2020, due to border closures in the wake of the Coronavirus (COVID-19) pandemic, still heavily restricted borders in 2021 resulted in further strong retail sales growth for cigars, cigarillos and smoking tobacco. Tobacco is a very popular product type in terms of cross-border trade and duty-free shopping.
Smoking prevalence of fine cut tobacco, by far the biggest category in terms of cigars, cigarillos and smoking tobacco in Norway, continued to decrease slowly, if steadily in 2021. Cigarettes and, even more so, fine cut tobacco smoking is stigmatised in Norway, As with cigarettes, consumers of fine cut tobacco tend to be mainly older consumers with several decades of smoking under their belt.
As in the case of fine cut tobacco, border closures and subsequent restrictions on border trade over 2020-2021 saw cigarillos buck the early-to-mid-review period trend of decline to register fast retail volume growth towards the end of the review period. Furthermore, more retailers, including convenience stores and forecourt retailers, expanded their selections of cigars and cigarillos to meet the increased demand for these products during the pandemic.
Strong declines in retail volume and value (constant 2021 prices) sales of fine cut tobacco are expected in 2022, as cross-border trade with Sweden and international travel, and, therefore, duty-free shopping, resume. This is set to shift volume sales away from the domestic market.
Norwegian cigar shops experienced greater activity during the COVID-19 pandemic, and they have established good relationships with new customers that hitherto tended to cross the border to Sweden to purchase cigars. While some consumers are set to resume this habit as borders reopen, likely resulting in a strong decline in retail volume sales in 2022 and 2023, some cigar smokers are expected to remain loyal, at least to an extent, to their local cigar shop.
Convenience stores and forecourt retailers saw some recovery in retail volume share in fine cut tobacco and cigars and cigarillos in 2021. They are well placed to continue to gain shares within these categories in 2022, as people resume their busy pre-pandemic lifestyles and the need for convenience increases.
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Cigars, Cigarillos and Smoking Tobacco
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