Economic Pressures & Downtrading Continue to Nag the Backbar

Similar to all categories in the convenience store, consumers' continued concerns over the economy are being reflected on the backbar. "We are incrementally cautious on the U.S. tobacco/nicotine industry in the near term given increased pressure on the tobacco consumer from persistent inflation, pressure on discretionary incomes and tighter regulations, all of which are driving lower usage of cigarettes and further downtrading," said Bonnie Herzog, managing director at Goldman Sachs.