The State Of Business

Posted 18th February 2021 by Dave Cross
Some predicted the vape bubble was set to burst in 2018, Planet of the Vapes looks at how the market is currently performing. While the introduction of the Tobacco Products Directive heralded the demise of some independent manufacturers mainly operating online, have businesses survived the denial of essential shop status and the enforced closure of brick-and-mortar stores during the COVID-19 lockdowns?

It was over two years ago that the BBC were asking if the vape bubble was about to burst1. Vapers, entrepreneurs, and those looking for a quick buck had opened up a vape store as vaping took off in the United Kingdom. The booming market couldn’t continue as it was.

At the same time, we revealed how small provincial market towns had become swamped with brick-and-mortar outlets. Kettering typified the country in that while some stores languished empty with boarded up windows, six vape stores had opened due to the booming national demand for vape products2. The town is now down to two stores, both of which have a strong online presence to compliment the physical offering.

Nothing the industry has faced could compare to the impact of the COVID-19 pandemic. The past year has been deeply troubling for the retail sector. Despite a positive attitude towards vaping and tobacco harm reduction from the government, it refused to grant essential status to stores no matter how many times the industry and advocates called for it3.

The areas that have weathered the storm have been the supermarket and convenience stores. Vape sales through these routes to market have grown by 34.7% and 36.6% receptively, according to John Patterson, sales director at Juul Labs UK.

It appears tobacco harm is still largely being ignored,” Patterson said. “The truth is that smoking is responsible for more deaths than road traffic accidents, obesity, alcohol and drug misuse combined in the UK.”

Vape Club

Driving those sales performance figures has been the pod system. Better Retailing reports that the overall vape market has grown by 63% year on year, with closed pod systems accounting for 34.5% of total sales.

The government’s position on vape store opening is barely understandable given what we know about the efficacy of vaping, the relative safety compared to smoking, and the support harm reduction has received from smoking cessation clinics.

With smokers being kept indoors, jobs put at risk, and the plethora of other stresses the population has been experiencing, the lack of a ready alternative has had one inevitable outcome: increased cigarette consumption.

British American Tobacco is set to announce 3.6% organic growth mainly due to its core tobacco products4, while Mediapost reports: “A shift back to cigarettes during the pandemic has paused a long sales decline, while posing more headwinds for the already challenged e-cigarette category5.”

What has been bad news for the independent brick-and-mortar owners has been a positive for those set up for or quick to put in place online routes to market.

Premier Ecigs

Ant Bentinck, Not Blowing Smoke6, told Planet of the Vapes: “The Covid-19 pandemic has created an extremely uncertain time for all businesses, however the vape industry seems to be widely unaffected. Our brick-and-mortar shops have been affected in terms of walk-in trade; a lot of customers have adjusted to the click and collect services we’ve offered. It’s unfortunate that we are not able to offer new customers the usual face to face experience, but we have adapted and started offering virtual consultations.

“Our existing online sales saw a 60% increase from March 2020 and we had to hire more staff to cope with the increased demand during the first UK Lockdown. Things have settled down since then, but we have seen our customer base grow exponentially as surrounding vape shops with no online presence remain closed.”

Lee Bateman, founder of Prime Vapes6, has seen similar changes in eCommerce activity. He said: “We’ve experienced a huge increase in demand for online orders. This increase, coupled with a reduced staff force, supply issues for raw materials, and delayed postal services has been challenging to say the least. Our staff have been working tirelessly (around the clock in some cases) throughout the pandemic to get our customers their products as quickly as humanly possible.

Vapekit’s7 Guy Lawler continues the theme: “We’ve seen a significant increase in online order volumes since the first lockdown in March last year and have had to hire additional staff in the warehouse to process orders. The pandemic has massively accelerated the shift to online shopping that has been happening in recent years, and this has led changes in peoples’ buying behaviour that will be hard to reverse. Whilst this has obviously been beneficial for our business, it’s undoubtedly been bad for consumers, as they’ve been unable to access the dedicated and knowledgeable staff in local vape stores which, in turn, has probably resulted in fewer people quitting smoking."

References:

  1. Up in smoke: Is the vape shop boom about to end? - https://www.bbc.co.uk/news/business-43965382
  2. Vape Bubble To Burst? - https://www.planetofthevapes.co.uk/news/vaping-news/2018-06-20_vape-bubble-to-burst.html
  3. UKVIA Calls For Essential Status For Vape Stores - https://www.planetofthevapes.co.uk/news/vaping-news/2021-01-07_ukvia-calls-for-essential-status-for-vape-stores.html
  4. Spotlight On Tobacco: Cigarette Sales Up In Pandemic, Vaping Declines - https://www.proactiveinvestors.co.uk/companies/news/941220/banks-bat-and-miners-among-the-big-hitters-in-the-coming-week-uk-inflation-and-retail-data-eyed-941220.html
  5. Not Blowing Smoke - https://www.notblowingsmoke.com/
  6. Prime Vapes - https://www.primevapes.co.uk/
  7. Vapekit - https://vapekit.co.uk/

Image by Free-Photos from Pixabay

SMKD


 Dave Cross
Article by Dave Cross
Freelance writer, physicist, karateka, dog walker
Vape Green