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Businessweek wonders why there are more tobacco shops

cigar_shopBusinessweek wonders why there are more tobacco shops. in their article published today.

Smoking in the U.S. has been declining for decades, but retailers specializing in tobacco sales are booming. The number of tobacco shops in America doubled between 1998 and 2012, to more than 9,000, according to Census data.

That growth coincided with rising cigarette taxes, indoor smoking bans, and other policies aimed at snuffing out the habit. The share of Americans who smoke fell to 19 percent in 2011, from 23.5 percent in 1999, according to the Centers for Disease Control. Why are tobacconists thriving when the market for their products is shrinking?   — BusinessWeek

Cigar Rights of America Commented:

The number of stores specializing in expensive cigars and other high-end products has declined over the past decade, according to Glynn Loope, executive director of Cigar Rights of America, which lobbies for premium cigar shops.

The article states that Ecigs and other alternatives to cigarettes are what would be driving the increased number of stores.    This might be true.   We also believe that though the number of high end cigar shops may of decreased over the past decade.  It wasn’t because of a lack of demand for the product,  it most likely was due to the fact that Online Cigar retailers have become increasingly more popular over that period of time.

It’s akin to saying that demand for Christmas Gifts are down if you factor in only physical purchases of products and completely ignore huge stores like Amazon.Com and other online vendors.

Amazon.Com generated $74.5 billion dollars in revenue in 2013 whereas Target generated 72.6B  (yes you heard that right, Amazon.Com generates more revenue than Target.)

Amazon.Com would be considered a single store, whereas Target would be considered 1,916 stores.   So counting the number the physical stores in regards to premium cigars isn’t exactly an accurate measurement.   A more accurate way to measure the results would be to count number of cigars shipped or dollar figure of cigars sold.   Though this might still reflect a decrease,  we doubt it is anything like how the article described.

It is an interesting article however and worth a read.