Sales of traditional cigarettes have picked up with the issuing of stay-at-home orders related to the COVID-19 pandemic, tobacco industry analysts said Tuesday.

For the week that ended March 22, traditional cigarettes sales volume rose 1.1%, according to Piper Sandler & Co. analysts.

By comparison, the industry experienced an 8.2% decline for the week that ended March 1.

Meanwhile, the latest Nielsen report on convenience-store sales found a 2.3% year-over-year decline for the four-week period that ended March 21.

“We believe these higher retail sales likely reflect stock-piling from COVID-19,” Piper Sandler analyst Michael Lavery said.

“We expect potentially higher consumption rates in addition to stockpiling, too, as smokers spend more time at home during quarantine, away from restaurants, offices and places with smoking bans.”

Both British American Tobacco Plc, owner of Reynolds, and Imperial Brands, owner of ITG, said recently they have not experienced any material impact on group performance to date from the COVID-19 pandemic.

Lavery also noted that traditional cigarettes sales may have gotten a boost from smokers dealing with personal stress, as well as a significant drop in gasoline prices.

“These data do not yet seem to support expectations of lower smoking rates as a result of respiratory illnesses associated with COVID-19,” Lavery said.

Cowen & Co. analyst Vivian Azer cited what she called an “initial pantry load from COVID-19” for the decrease in the sales-volume decline.

Azer said the Big 3 manufacturers — Philip Morris USA, R.J. Reynolds Tobacco Co. and ITG Brands LLC — continued to have private-label companies chipping away at their market shares.

Philip Morris USA was at 52.3% market share and Reynolds was at 31.8%. ITG’s market share was not mentioned.

Meanwhile, electronic cigarettes sales continued to slump during March, with recent federal regulatory changes playing a key role in demand declining for closed-pod cartridges.

Overall sales of mainstream e-cigarette products, as determined by total dollar amount, dropped 8.3% for the four-week period.

Overall e-cigarette sales-volume growth continued to decrease steadily since Nielsen’s Aug. 10 report, when it was up 60.2% year over year.

The latest Food and Drug Administration tobacco-industry restrictions debuted Feb. 6. The FDA raised the legal smoking age from 18 to 21 on Dec. 20.

Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings,” or risk enforcement actions on Feb. 6.

The menthol and tobacco flavors still allowed for cartridge electronic-cigarette flavorings are the same as those that are legal in traditional cigarettes. Feb. 6 also was the deadline for retailers to stop selling those products.

The Nielsen report showed the influence of the new FDA regulations. Cartridge e-cigarettes sales declined by 2% year over year, while the open-pod disposable e-cigarettes were up 78.7% and open-pod kits down 63%.

Juul’s four-week volume has dropped from a 50.2% increase in the Aug. 10 report to a 15.3% decline for the latest report. Juul holds a 46.1% market share, down from 57.6% on the Jan. 22 report.

NJoy continued to benefit from its discount-pricing initiative to post a 9.2% year-over-year boost, now worth a 17% market share.

Vuse, made by R.J. Reynolds Vapor Co., had a 9% year-over-year gain and grew its No. 2 market share from 22.4% to 25.1%.

Imperial Brands Plc’s blu eCigs brand had a 2.7% decrease and a 4.2% market share, down from 4.7%.

The federal Centers for Disease Control and Prevention has said its investigation into an outbreak of severe vaping-related illnesses is focused primarily on open-pod e-cigarettes in which liquids containing the marijuana compound THC are being vaped.

On Jan. 28, the CDC said “evidence is not sufficient to rule out the contribution of other chemicals of concern, including chemicals in either THC or non-THC products, in some of the reported cases.”

There have been few incidents reported involving the closed-pod e-cigarette cartridges of Juul, Vuse, Njoy and blu eCigs.



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