TORONTO — Retail analysts say a growing move to ban flavoured e-cigarettes due to health concerns could actually benefit convenience stores.
Bonnie Herzog of Wells Fargo Securities says a majority of retailers surveyed believe the removal of e-cigarettes would migrate smokers to combustible cigarettes that represent a larger portion of convenience store sales.
One-third of retailers surveyed also expect mint and menthol smokers would switch to combustible cigarettes because those consumers tend to want to stick with menthol products.
RBC Capital Markets analyst Irene Nattel adds that even if they’re not banned outright, large convenience store chains such as Alimentation Couche-Tard would be helped in the long-term by increased regulations of e-cigarettes because they have the ability to absorb the additional costs.
Meanwhile, Couche-Tard CEO Brian Hannasch says that while these products aren’t currently “material” to its revenues, it hopes they remain available for adults to give smokers “an avenue of lower risk as they pursue nicotine.”
However, if flavours are attracting children, Hannasch says it’s OK with them being banned for youth as long as the decision is done in a “thoughtful fashion and based on facts.”
Companies in this story: (TSX:ATD.B)