Retail trade incentives: how tobacco industry practices compare with those of other industries.

Abstract

OBJECTIVES: This study compared the incentive payments for premium shelf space and discounts on volume purchases paid to retailers by 5 types of companies. METHODS: Merchants were interviewed at 108 randomly selected small retail outlets that sell tobacco in Santa Clara County, California. RESULTS: Significantly more retailers reported receiving slotting/display allowances for tobacco (62.4%) than for any other product type. An average store participating in a retailer incentive program received approximately $3157 annually from all sampled product types, of which approximately $2462 (78%) came from tobacco companies. CONCLUSIONS: Future research should assess the impact of tobacco industry incentive programs on the in-store marketing and sales practices of retailers.

Tobacco companies’ use of retailer incentives after a ban on point-of-sale tobacco displays in Scotland

“…A key objective for tobacco companies is to achieve brand visibility and maximise potential marketing opportunities at the point-of-sale 2. Tobacco companies offer tobacco display unit contracts to retailers, whereby retailers receive a free regularly maintained storage unit in return for stocking and displaying the company’s brands in optimal positions 3. Retailers are encouraged to participate in ‘loyalty’ or ‘reward’ programmes which incentivise them for having products in stock, positioning and sales 4 5.…”

Point-of-sale tobacco promotion and youth smoking: a meta-analysis

“…Based on data from the USA, most industry expenditure on tobacco promotion is allocated towards retail incentives 3. These enable tobacco companies to communicate with consumers at the point-of-sale (POS) through advertising and product slotting in display units 4 5. The tobacco industry argues that POS promotions encourage adults to switch brands rather than encourage uptake of smoking among non-smokers.…”

Tobacco point-of-purchase promotion: examining tobacco industry documents

“…6 9 A 1999 California study found that tobacco incentives totalled an average of $2472 per retailer. 10 Furthermore, 62.4% of retailers reported receiving slotting/ display allowances for tobacco, a higher percentage than for any other product category.…”

“…11 The total of these two figures ($2634 in 2002) comes very close to the average tobacco incentives of $2472 per retailer found in the 1999 California study when inflation is factored in. 10 Several studies have examined the use of tobacco point-ofsale ads and displays at the retail level in the United States, and have found both advertising and product displays to be highly prevalent. In a 1991 study of 61 stores in Buffalo, New York, the average number of product displays varied from 4.3 per store for privately owned grocery stores to 7.8 per store for chain convenience stores selling gasoline.…”