15 Oct 2020
Posted in Consumer
UK cigarettes set for a heightened loss of US$1.9bn in 2020 as COVID-19 hammers health awareness and economic uncertainty
UK cigarettes set for a heightened loss of US$1.9bn in 2020 as COVID-19 hammers health awareness and economic uncertainty, says GlobalData
In the UK, cigarettes are expected to see a 15% drop on sales volumes and a 13% drop on value in 2019-2020 compared to pre-COVID projections. Sales volumes are now expected to fall from 25.7bn pieces to 21.9bn pieces, rather than 24.3bn pieces as had been previously projected, according to GlobalData, a leading data and analytics company.
Ryan Whittaker, Consumer Analyst at GlobalData, comments: “The UK Government has had a health-focused anti-smoking agenda for several years now. Furthermore, the emergence of COVD-19 has understandably heightened health and economic anxieties and convinced many UK consumers to quit. Stoptober will no doubt prompt a lot of these decisions as it enters its ninth year of campaigning.”
These factors have led to an additional revenue loss of US$1.9bn for the tobacco industry as health concerns regarding the COVID-19 pandemic continues to encourage significant numbers of consumers to quit tobacco products. During 2019–2020, cigarettes values were projected to fall from US$15.3bn to US$15.2bn, but are now projected to fall to US$13.3bn.
Whittaker continues: “Lower disposable income from reduced employment rates, lockdown-related closures and social distancing have all resulted in fewer social settings for smokers. GlobalData’s most recent consumer survey* found that around 8% of UK Gen Xers and millennials intend to stop buying tobacco and tobacco alternatives, considering them to be beyond their current shopping budgets.”
Stoptober encourages consumers to quit for 28 days, based on the evidence that smokers are five times more likely to quit for good if they can pass this milestone. Consumers are hyper-aware of health during the pandemic; in fact, GlobalData’s most recent consumer survey* found that while one in five UK consumers consider themselves ‘not concerned’ about their physical fitness and health, the remaining four fifths describe themselves from slightly to extremely concerned.**
Whittaker adds: “Smoking has been on a downward trajectory in the UK for several years, in significant part due to health concerns. COVID-19, however, has amplified the importance of that health message for many consumers, and for younger consumers, financial uncertainty has encouraged them to quit.”
* Covid-19 recovery tracker consumer survey, 21st September 2020
** Covid-19 recovery tracker consumer survey, 21st September 2020, combining answers “slightly concerned”, “quite concerned” and “extremely concerned”