Retailers are less confident that profits will increase over the next 12 months – but they are focusing strongly on the new lines, ranges and products they can offer in store to combat external pressures.
Rishi Sunak’s rain-sodden and D:Ream-soundtracked announcement that the country will be going to the polls in just under a month from now was a legitimate shock to many – not least some of those in his own party.
There are many questions about why he chose now, and what might happen from here. We do know that the ‘wash up’ period during which any outstanding legislation is pushed through will not be long enough to ensure the safe passage of the Tobacco and Vapes Bill.
This Bill restricts the display, flavours and packaging of vapes in stores, and would make it illegal to sell tobacco products to anybody born after 1 January 2009.
The ban on disposable vapes, which is scheduled to start on 1 April 2025, is not affected by this delay, regardless of who will be in power from 5 July.
And it is likely only to be a stay of execution for the Bill.
Legislation – and public opinion – on tobacco and vaping appears closely linked. The Bill’s second reading in April saw blanket support from Labour – the most likely party to form the next government. Almost 80% of Labour MPs voted in favour of the Bill passing; no Labour MPs voted against.
Legislation on tobacco and vaping has cross-party support – and support among the general population. A YouGov survey of 2,000 adults found 49% of people “strongly support” the phased introduction of a smoking ban; and 64% are in favour of the disposable vape ban.
Younger people were as behind the Tobacco and Vapes Bill as they are a ban on disposable vapes. Only 16% of 18-to-24-year-old adults said they were somewhat or strongly opposed to a ban on disposable vapes – and only 19% were similarly against the now-delayed phased smoking ban.
With a majority behind it, any incoming government would be mad not to push a version of it through as an early confidence winner.
So, where does this leave retailers? This week marks the publication of the latest Retail Sentiment report from Newtrade Media. The quarterly tracker aims to get a pulse on how retailers are feeling about their business, its prospects and the next few months.
With the ban on disposable vapes still scheduled to go ahead, my first thought was to look at the latest survey and work out how retailers will be tackling the future of the category. If opinion mirrors retailer thoughts on disposable vapes, it seems that retailers will feel similarly about the gradual phasing out of tobacco.
The topline findings give little away: 18% said a ban on disposable vapes was one of the biggest business threats to future profitability. On the flip side, 12% said that vapes was one of the biggest opportunities for their business over the next year. As the report says, “while negative news may dominate, there is confidence in diversifying even within a category”.
General Election causes uncertainty on legislation impacting stores
This was backed up by the ongoing focus that many retailers are putting on diversifying their offering over the next 12 months to counteract rising costs and increased overheads. Retailers seem to be increasingly confident in trying new things, and looking for new ways of driving both sales and profits – 39% of store owners surveyed said they would be looking to introduce new product categories. With the report finding that 71% of retailers review their product ranges on at least a quarterly basis, the chances for suppliers to get their innovative products and ranges in the nation’s 35,000 convenience stores have never been greater.
Retail is a difficult place to be in many ways, but the best retailers are looking at the ways to counteract price pressures and rising overheads.
As the report states: “Change in retail is quicker than ever, and this not only means jumping on trends more quickly, but also moving on from products that don’t sell as well. Supplier support on hitting the right price points to drive cross-channel success is more crucial than ever.”
While less than half of retailers (47%) have confidence they will increase their profits in the next 12 months, it is very clear that ‘Things Can Only Get Better’, as Rishi might not want to hear right now.
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