Why Focus on Stores? Stores are used as the main channel of communication by tobacco companies to reach new and current customers

How Many Tobacco Marketing Materials are in California stores? (1999 data)

Tobacco marketing materials in California stores are easily visible to children (1999 data)

Tobacco company marketing expenditures 2000 Point of Sale$347 Million3.6% Promotional allowances $3.9 Billion40.9% Retail Value Added$3.5 Billion36.7% Other (e.g., newspapers, magazines, transit, etc.) $1.8 Billion18.8% Total$9.6 Billion100.0% Source: Federal Trade Commission Cigarette Report for 2000

Changes in tobacco company marketing dollars in stores between 1990 and 2000 (in millions)

What are promotional allowances? Promotional Allowances are: Volume discounts: the more you sell, the better the deal Display allowances: payments to place display racks and shelving Buydowns: special sales on inventory

What is “retail value added”? Retail value added is a term used in the FTC report that includes multi-pack discounts such as “buy 2, get 1 free” and gifts with purchase such as a key chain or disposable camera

How do tobacco company marketing expenditures impact the store? Tobacco marketing expenditures dramatically alter the store environment: Special sales Lower prices Displays and shelving units Prominent ads and products

Special Sales and Lower Prices

Displays and Shelving Units

Prominent Ads and Products

Everybody advertises - so what? In-store marketing works: POS boosts tobacco sales by 12 to 28% 62% of 7th grade students recall tobacco ads in stores Youth who report seeing in-store tobacco ads were 38% more likely to experiment with smoking

What retailers have to say… In focus groups, California retailers say: In-store advertising increases sales of products Advertising closest to the counter has biggest impact on sales Advertising that highlights a reduced price is the most effective

Retailer focus groups (continued) Sales on cigarettes increase overall sales Price reductions and multi-pack discounts are the most prevalent and effective Sales on packs or cartons are due to “buydown” offered by tobacco company What retailers have to say…

What can we do to reduce tobacco marketing in stores? Raise community awareness about advertising. Increase compliance with and enforcement of existing ordinances. Require tobacco retailer licensing. Stimulate the passage of new policies: Exterior sign laws Self-service display bans