Inflation remains very much top of mind for consumers—and cigarettes have been the most inflationary, Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, said.
According to the July Consumer Price Index, cigarette prices were up 7.3%, more than any other category like food away from home, alcohol and carbonated soft drinks, Herzog said Friday at CSP’s Tobacco Plus Forum, which took place in Oak Brook, Illinois. “All tobacco products” was up 6.7%, according to the Consumer Price Index.
“For the average consumer, prices still feel very high and factor into purchase decisions,” Herzog said.
With the adult nicotine consumer under pressure, Herzog, citing the Goldman Sachs second-quarter Nicotine Nuggets survey of retailers and suppliers, said retailers remain broadly cautious about wallet pressures and downtrading,
In the survey, Herzog said 23% of respondents believe that the adult tobacco consumer is weaker today versus 24% in January.
“Price elasticities and downtrading remain top-of-mind concerns given value-conscious consumers,” Herzog said.
Of course, cigarettes are still declining and also remain pressured, she said.
“Concerns about downtrading and ela...