More disposable income due to less spending on travel and entertainment because of the outbreak of the novel coronavirus, plus more generous unemployment benefits and one-time government stimulus payments, is significantly slowing the deterioration in cigarette sales, makers of the Marlboro brand said Tuesday.
Combined that with increased federal regulation of vapor inhalers driving many back to traditional smoking, Altria Group said it now expects its sales of cigarettes to fall 2%-3.5% this year in the United States, a nearly 50 percent improvement from its previously forecast 4%-6% drop.
Besides Marlboro, the best-selling cigarette brand in the United States and world with 40% of the American market, Altria produces the Chesterfield and Parliament brands.
“Fewer social engagements allow for more tobacco-use occasions,” Altria CEO Billy Gifford told analysts on an earnings call Tuesday, according to The Wall Street Journal.
He added that has created more time to smoke at home. And although unemployment is relatively high, enhanced unemployment compensation and stimulus money has eased the hardship on low- and middle-income cigarette smokers. Smokers are making fewer trips to buy cigarettes, but when they go, they are buying more in bulk, Gifford said.
Altria already had started to see an uptick in traditional cigarette sales after the Food and Drug Administration in February banned fruit and mint flavors, popular with younger people, in cartridge-based vapor inhalers.
That sent many vapers, particularly those over 50, back to cigarettes.
“That consumer was faced with choices,” Gifford said. “It benefited the entire cigarette category.”
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