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| ROUNDTABLE: THE FUTURE OF STORES |
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Page 1 of 2  Comments from leading U.S. cigar retailers Keith Meier, Lew Rothman and Arthur Zaretzky!Los Angeles, July 8, 2009 – Common wisdom in the cigar trade is that the four largest national retailers are almost certainly J-R Cigars (Whippany, New Jersey), Cigars International (Bath, Pennsylvania), Thompson Cigar Co. (Tampa, Florida) and Famous Smoke Shop (Easton, Pennsylvania). Three of these are within a 90-minute drive and so we took the opportunity to interview Lew Rothman of J-R, Keith Meier of Cigars International and Arthur Zaretzky of Famous between June 27-29 on their view of the cigar trade today . . . without having to get them into the same room at the same time. As expected, their views were quite different on some subjects and more unified on others. Highlights: Question: what’s the future of cigar retailing in the United States? Zaretzky: “The way that I see things is, and if there are any retailers who are going to be listening to this, I know that they consider companies like mine to be their enemy, however, I see it more as a symbiotic relationship, and the state of affairs is really not a result of anything that the Internet or mail-order companies have done. “It’s more a result of what the state legislators have done to make life in their states impossible to survive in. Naturally, the retailers look for a scapegoat and say ‘if the mail-order companies didn’t exist, we would have a better business.’ I don’t believe that would necessarily be the case. There will be a raison d’etre for cigar stores to stay in existence and the cigar store of the future, I think, is going to be more of a club/hang-out environment, and much of the revenue is going to be derived from membership fees and the smart retailers will survive and many other retailers will not survive.” Meier: “Just speaking about state excise taxes for one minute, when Florida is 6%, maybe 7% of the U.S. population, and our sales into Florida are exactly that, maybe with a rounding error to the 100ths of a percent. If you think that people are buying because of taxes, wouldn’t you expect the California business to be more than the percentage of the population, but it’s almost identical. There are two exceptions: Texas is a weird one and North Carolina is a little bit weird too, but those are the only two significant differences, population vs. our percentage of business in those states. I am convinced that people buy based on brand, convenience and so on and I think that people who are mail-order buyers are mail-order buyers who sometimes buy in stores and people who are brick-and-mortar guys occasionally buy online, but by and large, they are brick-and-mortar store [buyers]. “There’s sort of this myth that we’re fighting over [cigar buyers]. I think mail-order guys are fighting with each other, but there’s been a shift to the Internet and to catalog companies, sure, because of (1) it’s the convenience and (2) selection, if you can have every brand under the sun [you will attract more buyers]. Those very [retailers who criticize catalog companies] are buying their books from Amazon, and ask themselves ‘why am I doing that?’ “So the brick-and-mortar retailer has a real advantage, though, in making his place a destination, making it a bar. How many great bars that you go to are pubs or other types of establishments that you don’t fight over price and say, ‘this draft beer is $6 and I can get a case of this stuff for $24.’ You’re competing on ambiance, you’re creating an atmosphere that draws people into your store, you create points of differentiation and we’re a retailer, too, and I know this. |
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Did you know?
“Although still available on the market in some shapes, production of the Royal Jamaica brand ceased in 2000.
