US: Cigarette Sales Are Soaring at Dollar General, Showing Why Retailers Are Addicted to Tobacco

Source from:  Money Fool  03/19/2014

The anti-tobacco movement can hoot and holler all day long about the well-known negative impact of cigarettes, but the reality is that the tobacco business is too lucrative to disappear anytime soon. Few companies demonstrate this better than Dollar General (NYSE: DG  ) , where sales have shot higher since the chain began stocking cigarettes in the middle of last year.

Dollar General is also seeing traffic count increase as customers discover that it's in the tobacco business. Dreiling addressed this on the company's latest conference call:

If you look at the fourth quarter, we're one of very few retailers who called out the fact that we still had transaction growth. So I feel, as we move through the back half of the year, that tobacco is going to continue to do what it's been doing, deliver -- it's going to deliver transactions and then, more importantly, the attachment rate is continuing to grow. Enditem