SIC 5993 Tobacco Stands and Stores

SIC 5993

This entry includes establishments primarily engaged in the retail sale of cigarettes, cigars, tobacco, and smokers' supplies.

NAICS CODE(S)

453991

Tobacco Stores

According to the "Industry Report 2003," a Smokeshop Magazine survey, most retailers were seeing slow eroding of sales year after year. However, discount tobacco outlets grew in number, with cigarette sales slowly growing. Nearly 20 percent of sales in the industry were mass market cigarettes, followed by premium cigars with 38 percent. Other products sold by these establishments were pipes, smoking accessories, non-premium cigars, loose tobacco, and non-tobacco merchandise, such as lottery tickets and pens. The average annual sales per store was just over $600,000.

Tobacco specialty stores, often called "smokeshops," were traditionally located in malls or downtown business districts. The mall shops were often part of a chain, while the downtown shops tended to be independent stores that also sold other items such as magazines and newspapers. Historically, tobacco manufacturers subsidized some of these endeavors in an effort to ensure a constant retail outlet for their products. The largest domestic concentration of smokeshops appeared in the southern United States, with 1,516 establishments reported. Although the total number of establishments declined by 23 percent in the late 1990s, Montana, South Dakota, Wisconsin, Oklahoma, and the District of Columbia reported an increase in the number of shops. Across the United States, the number of shops declined at a rate of eight to one. The most significant decline was in the western states with 35 percent reduction in stores. Total sales dropped by 14 percent, although employment in smokeshops increased from an average of five employees per store in 1997, to 7.4 employees in 1998, with 43 percent of smokeshops offering employee fringe benefits.

The number of tobacco stands decreased steadily in the United States during the latter half of the twentieth century. Declines were attributed to a change in lifestyle for many Americans as businesses moved out of downtown areas where support for smokeshops was high. With less pedestrian traffic, the smokeshops lost clientele. Many of the smokeshops that were located in malls in the 1970s slowly disappeared in the 1980s as rents climbed too high for small businesses to endure. Additionally, the steady decrease in consumption of most tobacco...