TGP96

Tobacco and Primary Medical Services (Scotland) Bill

Institute for Social Marketing

We appreciate the opportunity to contribute to this consultation. One of the primary purposes of the Bill is to control the display of tobacco products in order to reduce the attractiveness of cigarettes, which will be the exclusive focus of our submission. We demonstrate the need for the removal of point-of- sale (POS) tobacco displays via summation of the business literature, recent UK research and tobacco industry documents.

Business case: Why a ban on tobacco displays will be good for small shops

There has been a lot of misleading debate about the business impact of removing POS display. In reality, far from harming small shops, this legislation will help them move their businesses in a progressive and forward looking direction. Small shops succeed because they provide good, personalised service that meets the needs of their customers and local communities. Customers are important for obvious reasons, and getting plenty of them into the shop - increasing ‘footfall’ - is a key concern. Community support is equally important, however, because small shops draw most (60%) of their custom from people living within 440 yards of the outlet (Convenience Store, 2007). In deference to this local focus the Association of Convenience Stores has for years run a major promotional campaign to find stores that are ‘Community Heroes’, arguing that “more and more retailers are recognising the importance of being at the heart of their community” (ACS, 2009).

The massive tobacco gantries that currently dominate many small shops, far from helping small shopkeepers meet these key objectives, actually hinder them. As far as footfall is concerned, POS displays cannot help because they only become visible once the customer is in the shop: a signpost is useless if you only see it once you reach your destination. Second, even in the shop a tobacco display serves little purpose because we know that less than 7% of smokers make their purchase decision in store (Cancer Research UK, 2008). Indeed a good local shopkeeper knows this, and their customers’ preferences, so well that they will have their usual brand out and ready for them by the time they reach the counter. This local knowledge and personal service is one of their key competitive advantages: here they can challenge the supermarkets.

Large gantries also waste a good business opportunity because the margins on tobacco are relatively low when compared to other products. Smokers matter to small shops, therefore, not so much for their tobacco buying, as for their impulsive secondary purchases, such as the chocolate bars, batteries and newspapers, that are bought alongside the cigarettes. It therefore makes much better business sense to devote the premium sales space currently given over to tobacco (which, remember, the smoker decided to buy before they even came into the shop) to displaying these discretionary products.

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Tobacco gantries also damage the shopkeepers’ drive to be at the heart of their community. The only tobacco purchases that displays are likely to promote will come from would-be quitters who fall off the wagon when confronted with an evocative array of their favourite drug; or from children tempted to chance their arm given the proximity of such a helpful visual aid. So they undermine good intentions and harm children. Small shopkeepers will do their reputations enormous harm if they become the cheer leaders for such unscrupulous marketing.

Finally, any successful business has to look forward, to plan strategically for future opportunities and importantly not to cling on to outmoded needs and markets. The reality is that Britain is moving away from tobacco; a British Medical Association report predicts that the habit will vanish altogether in a generation (Hastings & Angus, 2008) and business has christened it a ‘sunset industry’ (Tsang, 1998). This is also recognised within the trade press, with reference to the fact that “we are investing heavily in non-tobacco areas, as frankly that is where the future is” (Convenience Store, 2008).

Far from opposing this legislation, therefore, small shops should welcome it. It will increase their competitive advantage over the supermarkets, at a time when the market dominance of superstores threatens the very existence of independent retailers (Jones et al. 2005; Association of Convenience Stores, 2005) in not only Western but also Central and Eastern Europe as well (Juhasz & Stauder, 2005; Vranesevic et al. 2006; Parker et al. 2007). It also enhances their business efficiency and openly supporting it will reinforce their community credentials.

Public Health case: UK research highlights the problem of POS tobacco displays

Recent cross-sectional and qualitative UK research helps demonstrate young peoples’ awareness of, and attraction to, POS marketing, including display. The Youth Tobacco Policy Survey (YTPS) examines adolescents’ awareness of tobacco marketing (including at POS) from 1999 to 2006; prior to and following the implementation of the Tobacco Advertising and Promotion Act (TAPA). In 2008, the YTPS examines adolescents’ awareness of POS displays in shops and their views on moving cigarettes out of sight.

Data comes from the first five waves of the YTPS (1999, 2002, 2004, 2006, 2008); employing a total of 5880 adolescents with a mean age of 13. The impact of tobacco marketing at POS is examined in relation to the changes, from 2002 to 2006 (pre-ban to post-ban), in awareness of tobacco marketing, relative salience of POS marketing and brands associated with POS. Changes over time are also examined in relation to brand awareness. In addition, the association between never smokers’ susceptibility to smoke and their awareness of tobacco marketing and cigarette brands is examined.

At Wave 1 (1999) young people had high familiarity with tobacco marketing; with most aware of large posters/billboards (79%), signs/posters in shops or on shop fronts (73%), adverts in the press (52%) and free gifts associated

TGP96 with cigarettes (56%) (Moodie et al. 2008). Awareness of most forms of marketing declined between 1999 and 2006. With the TAPA fully implemented in 2006, POS adverts in store or on shop fronts became the most salient form of tobacco marketing, with almost half (46%) of the sample aware of this (Hastings et al. 2008).

Unprompted recall of cigarette brands decreased from Waves 1 to 4, from 3.09, 2.64, 2.42 to 2.24. Unprompted awareness of most brands decreased between Waves 2 and 4, with the exceptions being Silk Cut, which maintained its awareness, and Richmond and Mayfair, where awareness increased – all brands heavily marketed at POS (Hastings et al. 2008). Brand recognition of each brand also decreased between 2002 and 2006, although high levels of recognition were still evident in 2006 for Lambert & Butler (78%), Benson & Hedges (66%) and Marlboro (65%) – again brands often centrally positioned in the gantry. From 1999 to 2006, never smokers susceptibility increased with greater brand awareness (OR=1.09, p<0.01) and greater awareness of tobacco marketing (OR=1.07, P<0.01). In the 2006 survey, never smokers’ awareness of cigarette brands was positively associated with awareness of tobacco marketing at POS. Regression analysis, controlling for parental, sibling and peer smoking, gender, age and social grade, found that awareness of tobacco marketing at POS (t=2.294, P<0.05) and awareness of new pack design / size (t=3.312, P<0.01) were both positively associated with cigarette brand awareness (F9,673=23.3, P<0.001) (Hastings et al. 2008).

In the 2008 survey young people were asked (i) whether they had seen cigarettes displayed in shops in the last month (ii) how often they pay close attention to cigarette packets displayed in shops (never, rarely, sometimes, often or very often) and (iii) whether they agree or disagree that cigarettes should be put out of sight in shops (agree a lot, agree a little, neither agree nor disagree, disagree a little, disagree a lot). Findings revealed high awareness of cigarettes displayed in shops, with 82% of participants having seen cigarettes displayed in shops in the previous month; irrespective of age, gender or smoking status. Almost a third (32%) of regular smokers pay close attention to cigarette packets displayed in shops compared with 4% of never smokers. Almost two-thirds (64%) of 11-16 year olds agreed (a lot or a little) that cigarettes should be put out of sight in shops; mostly never smokers (72%).

The YTPS demonstrates that high awareness of POS and the brands most prominently displayed at POS remains, which normalises tobacco products among young people and undermines the TAPA (Brown & Moodie, in press), which has otherwise successfully reduced awareness of various other forms of marketing (Moodie et al. 2008). The YTPS also reveals that the vast majority of young people favour the removal of tobacco displays, and separate qualitative research helps to reveal why. Twelve focus groups, half comprising smokers (N=32) and half non-smokers (N=35), were conducted with adolescents (11-16 years) recruited from Glasgow and Lothian in 2008; each focus group segmented by age, gender and smoking status (Brown & Moodie, submitted). Young people were asked to discuss their views on anti-smoking ads, smokefree legislation, access to tobacco, health warnings and POS

TGP96 tobacco displays. Young people commented that POS tobacco displays were ‘obvious’ within shops due to the ‘massive display’, and such displays appeared to be attractive to both male and female smokers, being described as ‘cool’ and likely to encourage smoking or stimulate purchase. Even non- smokers could see the appeal of cigarette displays, stating that ‘things like this attracts people to smoke’; which helps explain why so many youngsters in the YTPS favour their removal. See below for a sample of comments relating specifically to POS tobacco displays:

‘It’s obvious in shops’ (Male 15, C2DE, Smoker) ‘Cigarette displays in shops makes you think that it’s cool to smoke’ (Female, 13, C2DE, Smoker) ‘Say you enter into the shop you see this massive display over the counter. In the shops things like this attracts people to smoke’ (Male, 11, ABC1, Non-smoker) ‘Looks cool’ (Female, 14, C2DE, Smoker)

These studies help to illustrate young peoples’ high awareness of, and favourable perceptions towards, POS marketing, including display. This ties in with the wider literature, which has been discussed elsewhere (Hastings et al. 2008), which similarly suggests that POS product display does encourage young people to initiate smoking and also adults to maintain, or re-engage with the habit (Hastings et al. 2008).

Tobacco industry view: UK marketing documents highlight the value of POS and the gantry

To gain an insight into how the UK tobacco industry viewed POS and the gantry prior to the TAPA, we searched tobacco industry marketing briefs (www.tobaccopapers.com). Using the search terms ‘point of sale’, ‘point-of- sale’, ‘P.O.S.’ and ‘gantry’, we located over 80 relevant marketing documents, some of which are mentioned below.

With marketing restrictions looming, various documents alluded to the increased importance of other marketing channels, for instance, ‘Sampling and point-of-sale are probably going to be the major promotional platforms in just over six months time, and it is essential to consider on what basis these should be targeted now’ (CDP, 1999a, p.1). Another brief mentioned increasing ‘awareness of the implications of a Tobacco communications ban in an effort to motivate people to question a blanket ban, thereby enforcing public pressure on the Government to reduce the severity of the ban (ie. maintain the use of direct marketing, package design, point of sale & promotions)’ (M&C Saatchi, 1997a, p.2). And a Gallaher report stated that ‘Post ad ban the only way that we will be able to give Silk Cut ongoing brand differentiation from other low tar brands, will be at the point of sale, on the packaging itself, and through activity taking place outside the UK’ (Gallaher Group Plc, 1998, p.16).

Although denied sampling, direct marketing and promotions, the absence of restrictions on other forms of marketing, such as POS display and packaging,

TGP96 have allowed the industry to continue marketing their wares. Referring to the impact of advertising bans on product promotion, a Gallaher document highlights that ‘Even in the presence of an advertising ban it is possible through intensive point of sale efforts, price discounting and the use of new communications media to reinforce the image of existing brands with the consumer and to launch new brands’ (Gallaher Group Plc, 1997, p. 6/7). The common theme that emerges from these industry documents, pre-TAPA, was that with the regulation of other marketing channels ‘Point-of-Sale will be crucial’ (CDP, 1999a, p.2). For this reason there was a ‘Massive movement of advertising funds to other areas pre-ban: sponsorship, gift schemes, point of sale’ (CDP, 1999c, p.40) with a particularly strong emphasis on ‘CONCENTRATION AT P.O.S.’ (Gallaher Group Plc. 1996, p.4) – following trends in other countries that have imposed advertising bans.

The gantry is of course central to POS marketing and the retail environment, which is why tobacco companies, such as Gallaher, desired ‘more creative point-of-sale solutions in hand, especially gantry ideas’ (M&C Saatchi, 2000, p.37) and why documents allude to the importance of ‘Dominating the gantry’ (CDP, 1995, p.16). Other industry briefs indicate that the gantry performs multiple functions. It allows the industry to advertise; ‘Cigarette companies see the gantry as a valuable place to advertise’ (Mustoe Merriman Herring & Levy, unspecified, p.8). It enables the industry to communicate with consumers, whether it be low value, pack innovation or brand imagery; ‘communication will be by using Silk Cut's new gantries’ (M&C Saatchi, 1995, p.2). And it also helps create brand loyalty; ‘gantries benefit from being point-of-sale (particularly valuable if consumers are not loyal to a brand)’ (CDPb, 1999, p.23). It is interesting that this last brief does not refer to smokers who are not loyal to a brand, but to consumers, which encompasses everyone who enters the retail environment, regardless of smoking status or indeed age.

It is worth highlighting that although the gantry is of considerable value to the industry, what is contained within the gantry is of even greater importance, i.e. cigarette packs. A review of internal documents in the U.S. shows that the tobacco industry has painstakingly researched the appeal of packaging to consumers; most commonly young people and women (Wakefield et al. 2002; Cummings et al. 2002). The UK marketing documents similarly shows that there has been extensive consumer package testing (e.g. Marketing Sciences, 1998; RMC Associates, 1998) which is a concern as packaging is not just the end-point of tobacco marketing communications but is, in itself, a potent form of marketing. This has long been recognised by the industry, who claimed almost thirty years ago that, at some stage, and as a result of marketing restrictions, ‘the product may have to sell itself through the pack’ (Ferris, 1980, p.2).

Conclusions

Tobacco is, and will continue to be, a footfall driver for retailers, even without the presence of gantries, which take up valuable space that could otherwise be used to drive more profitable product categories. POS display is central to tobacco industry marketing in the UK and allows the industry to skirt the TAPA

TGP96 and undermine progress made in tobacco control. But most importantly, POS display not only captures the attention of young people but serves to normalise, and encourage, tobacco consumption.

Prof Gerard Hastings Director Institute for Social Marketing 9th April 2009

References

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Cancer Research UK (2008). BRMB omnibus survey: Smokers attitudes to branding and point of sale displays. London: Cancer Research UK.

CDP (1995). Generating revenue. A short presentation for the 1995 Gallaher Marketing Conference. http://www.tobaccopapers.com/PDFs/00010099/0025.pdf

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