From: This is Derbyshire
CORNER shops in Derbyshire are seeing profits plummet and are having to lay off staff because they are being undercut by the illegal tobacco trade.
Dee Sadani manages two Londis shops – one in Etwall and the other in Matlock.
In the past year, he has had to lose a member of staff in each of his shops because of falling profits.
Tobacco sales make up nearly a quarter of his overall sales.
“It really is a twofold problem,” he said. “The first is the high tax on cigarettes, which keeps going up.
“Then we have the tobacco smuggling because people can’t afford to buy the genuine tobacco and that has an impact on people like me.
“Tobacco sales have been down about 14% each quarter for the last couple of years for me.”
Mr Sadani, who is also a member of the Tobacco Retailers’ Alliance, added: “The people who come in for tobacco products are adults and normally they buy something else while they are at the shop, so we are also missing out on the extra bar of chocolate or bottle of water they’d buy.
“At one store, I’ve had to reduce the staff hours by 16 per week and at the other by 12. That means I’ve had to let one person go in each store.
“It’s the first time I’ve had to do that.”
In the East Midlands, 21% of corner shops say they are considering closing because of the effects of smuggling and cross-border shopping on tobacco sales. Thirty-four per cent are considering reducing staff.
Those statistics, compiled by the Tobacco Retailers’ Alliance, put the region as one of the worst-affected in the country.
Mr Sadani said he believed Derby was particularly badly hit because of high unemployment.
“Derby has got a problem with the number of people out of work, which means people are going for the cheaper, illegal products,” he said.
He said taxes on tobacco needed to be reduced and more work done to crack down on the illegal trade.
The city council’s trading standards officers have carried out several disruption activities to target the problem.
Last month, they visited 22 shops in Derby and found more than half selling counterfeit booze, cigarettes and tobacco. The licences of four are due to be reviewed as a result.