Friday, January 11, 2013

Dollar General to sell tobacco

Company official expects a short-term bump in sales
By Nick Tabor, New Era Senior Staff Writer
Four months after stocking their coolers with beer and their shelves with wine, the Dollar General corporation now plans to introduce cigarette sales as well.
It’s a “dying category,” said Mary Winn Gordon, vice president of investor and public relations. But for now, store managers are reporting that customers want them. So even if it only creates a one-time “bump” in revenue, Dollar General will take it.
Some Crofton residents are already boycotting the store just outside their town’s boundaries because it sells beer and wine. They’ve mostly given up the fight to have the store’s alcohol license revoked.
So the introduction of tobacco products is basically moot to them.

“Dollar General is simply responding to the accepted societal norms in this nation,” Senior Pastor of Cornerstone Bible Church Kris Page said in a written statement. “The effort to boycott this store is not going to change the principle of supply and demand. The only way to change the current climate of the American marketplace is to confront the desires of the consumer through the teaching and application of Biblical truths in our churches, homes and schools.”
Crofton Bestway, an independent grocery store, now has an alternative for the boycotters: an aisle full of canned food, paper products and other merchandise, all priced below $1. And it has never stocked synthetic drugs or condoms, let alone beer or wine.
“Being a family store, we actually try to respect the community,” said the owner, Hemal Patel. “We don’t even have a lottery in the store.”
But the store does sell tobacco — it even guarantees the town’s best prices — and this hasn’t created the same kind of stir.
Crofton residents missed their chance to protest when Dollar General applied for an alcohol sales license in June. The application sailed through, and the news surprised and upset the small community in September. No stores sold alcohol there beforehand.
In a Dec. 11 earnings call, Dollar General officials said they would roll out tobacco products over two quarters, which means most or all stores should carry them by mid-year.
In the test market, customers commonly increased their basket amounts from $10 to $14 in the stores that carried cigarettes. That increase is less than the average cost of a pack, which suggests customers were foregoing something else to buy cigarettes, said Richard Dreiling, the corporation’s CEO. But it also tends to increase traffic, he said during the earnings call.
He also predicted the extra revenues it generated will die out before too long. But the company is responding to its clientele.
A report from the U.S. Centers for Disease Control and Prevention support Gordon’s remark about the “dying category.”
Cigarette consumption in the U.S. has dropped every year since 2000, when it totaled 435.6 billion cigarettes. Five years later, it was down to 381.1 billion. In 2011, it totaled 292.8 billion.
But Kentucky is holding strong. The CDC estimates that 25.2 percent of the state’s adults smoke, compared to a national median of 18.2 percent.
Kentucky retains the highest rate of smoking-related deaths and the highest ratio of youth aged 12 to 17 who use some form of tobacco, the CDC reports.
Dollar General has 393 Kentucky stores, according to its website.

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