Vapes four times more profitable for shops than tobacco as sales surge
Vaping has become a lucrative lifeline for convenience stores, with profits from these products surging past their tobacco rivals. Vapes are now four times as profitable for shops as tobacco, a University of Edinburgh study has found.
Over a three-year period, vape sales have surged, bringing retailers an average profit of 37.1 per cent per product, compared to just 8.5 per cent for tobacco. Back in 2019, the average store had just 10 transcactions involving vape products a week.
By 2022, this had skyrocketed to 93, a ninefold jump. And researchers believe this upward trend has likely continued well beyond 2022.
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While vaping gains ground, tobacco's dominance in small retail outlets is fading. Footfall driven by tobacco sales has plummeted by nearly 40 per cent over the past decade, the study shows.
Back in 2015, tobacco accounted for 21 per cent of transactions, but by 2022, this had dropped to 12.8 per cent. This decline mirrors broader national trends, with 16 per cent of UK adults being smokers in 2016 compared to a quarter less in 2023 (12%), according to the Office for National Statistics.
The Edinburgh Uni study highlights how the shift from smoking to vaping could benefit small retailers, making tobacco sales increasingly less critical to their success. However, researchers emphasised the need for stronger regulations.
The importance of a retail licensing program to discourage irresponsible sellers and protect legitimate retailers was further highlighted by the increasing popularity of vapes.
Professor Jamie Pearce, professor of health geography at the University of Edinburgh, said: “Our analysis shows that convenience stores now make only 10 per cent of their profits from tobacco and if their customers were buying products other than tobacco, stores would benefit from this.
“Sometimes business and public health interests align – we would all be better off if fewer people bought tobacco.”
Action on Smoking and Health chief executive Hazel Cheeseman said: “Tobacco is yesterday’s product. The reduction in sales benefits both the nation’s health and convenience stores who make dwindling profits from selling tobacco. At the same time vape sales have surged, and this is much more profitable for retailers.
“Responsible retailers who are already profiting from vapes should welcome regulations to improve the market, reduce appeal to children and drive out rogue traders.”
The UK Parliament is currently debating the Tobacco and Vapes Bill, a significant step aimed at phasing out smoking for future generations. Under the proposed law, anyone born after January 1, 2009, will never be able to legally purchase tobacco as the minimum age for buying cigarettes will gradually increase over time.
The bill also targets vaping, introducing new restrictions to lower its appeal among children and young people. Sweet vape flavours are set to be limited, and the design of e-cigarette packaging will be reviewed to make it less attractive to younger audiences.
Stricter advertising rules form a key part of the legislation. A total ban on vape advertising and sponsorship will be enforced, extending to public displays on buses, in cinemas, and even shop windows, bringing vaping regulations closer to those governing tobacco products.
Meanwhile, disposable vapes will be outlawed starting June 2025 as part of environmental reforms. The sale of vapes through vending machines and the free distribution of these products will also be prohibited under the same initiative.
In Scotland, a ban on selling single-use vapes was due to come into force on April 1, after Holyrood passed the regulations. But last October, Health Secretary Neil Gray announced that Holyrood would now amend the date to June 1, falling in line with the rest of the UK.
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