On August 4, 2017, the Minneapolis City Council voted 10-2 to adopt an ordinance banning the sale of menthol cigarettes and mint and wintergreen smokeless tobacco products at all retail stores except tobacco shops and licensed liquor stores. This means that over 200 retail stores will be prohibited from selling legal menthol cigarettes and mint and wintergreen smokeless tobacco products. The ordinance is scheduled to take effect on August 1, 2018.
Prior to the adoption of the ordinance, Management Science Associates conducted a study on the potential economic impact of the menthol, mint and wintergreen sales restrictions. The study made the following conclusions:
- Menthol cigarettes currently account for 43% of total cigarette volume and 88% of total menthol tobacco volume in Minneapolis.
- The convenience store channel represents 73% of menthol cigarette volume in Minneapolis. Together, tobacco outlets and liquor stores comprise only 9% of menthol cigarette volume.
- In the U.S., 35% of convenience stores’ in-store revenue comes from tobacco. Tobacco is convenience stores’ second largest source of in-store gross margin dollars.
- It is estimated that Minneapolis convenience stores would lose up to $40 million annually in menthol, mint and wintergreen tobacco sales and ancillary in-store purchases.
- The average convenience store would lose between $238,000 and $259,000 in annual sales and incur a gross margin loss of $38,000 to $44,000 per store.
- There are approximately 30 stores in Minneapolis that would close and the other remaining stores in Minneapolis would cut employee hours in line with their lost menthol tobacco profits.
- This loss of sales and store closures is estimated to negatively affect approximately 940 employees (a mix of full-time and part-time jobs) or the equivalent of 630 full-time jobs.
This likely economic impact demonstrates why retailers that sell tobacco products need to engage in local advocacy to oppose such a sales restriction. A broad menthol, mint and wintergreen ban is not survivable by many small, family-owned convenience stores and the result will be the closing of stores, the loss of investment in retail businesses, and, in Minneapolis, almost 1,000 retail employees would lose their jobs.