Bucking nationwide anti-smoking efforts and vexing health officials, outlet stores that sell heavily discounted cigarettes are opening at the rate of one a day throughout California, offering smokers a haven from a world that increasingly disdains them.
Cigarettes Cheaper!, a Benicia, Calif.-based chain, has grown from one store in October 1994 to nearly 130 with plans for 500 by year-end. More than a dozen of its stores have opened recently in the Los Angeles area, mostly in the San Fernando Valley. Other discount chains are popping up as well.
The new stores are embracing cigarettes and the smoking public at a time when the state is cracking down on vending machines, grocery stores are locking cigarettes behind glass, and pharmacies are refusing to sell them.
The discount outlets, typically housed in mini-mall doughnut shop-type space, are wall-to-wall cigarettes. Clerks smoke on the job and customers are encouraged to light up. At Cigarettes Cheaper!, 10-pack cartons of Marlboros go for $13.99, compared to $17.39 in many grocery stores.
"Nobody can beat it," said Tarzana resident Risma Gasparians, who stopped by a Cigarettes Cheaper! outlet near her home to pick up a carton of Marlboro Lights. Gasparians described herself as a longtime smoker and added firmly that she intends to remain one. "I used to go to Price Club, but not after I found out this was here."
"I shop there because the price is low, and the place, I like it," said Edward Eldar, a watchmaker who used to shop at a liquor store. He even has a Marlboro jacket and a cooler he got through a promotional giveaway.
The discount trend is irksome to public health advocates.
Cheap, generic cigarettes are bad enough, said Dr. Michael Eriksen, director of the Office on Smoking and Health at the U.S. Centers for Disease Control and Prevention in Atlanta. But "cheap Marlboros are the worst."
That's because they combine the wide appeal of one of the nation's most heavily advertised brands with the attractive prices of generic ones, Eriksen said.
Price and consumption are closely tied, he said. For every 10% increase in the price of cigarettes, there is a 4% drop in consumption, the U.S. surgeon general has found. This seems even more true of minors, among whom consumption falls as much as 14% for every 10% increase in price.
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Brenda Bell Caffee, coordinator for African-American Tobacco Education Network, contends that discount cigarettes are aimed at the poor and at minorities. Rates of smoking among African Americans are among the highest of any ethnic group in California, according to the CDC.
"It's not as if . . . they are making housing affordable. You are taking something that is bound to cause you health problems, and making it affordable," she said.
Such talk irritates the entrepreneurs leading the discount store charge. Like many in the business, Mark Baldwin, 34, president of Cigarettes Cheaper!, not only resents the regulation of smoking, he opposes government regulation and taxes in general. His stores sell copies of an anti-government book written by Libertarian presidential candidate Harry Browne, and employees get $10 if they read it.
Baldwin is so anti-government that he says he won't vote for the Libertarian candidate; he doesn't believe in voting.
A nonsmoker, Baldwin says smokers are "maligned and oppressed. There probably are health risks associated with smoking," he added. "But everyone who smokes understands the possible trade-offs."
Baldwin says he is in the process of expanding into Nevada and Illinois. He declined to discuss how the chain is financing its rapid growth. Nor will he say whether the chain is profitable. Instead, he said that although opening so many stores is costly and traffic in some seems slow, the chain is "meeting expectations."
Another discounter, The Cigarette Stores, owned by Modesto-based jukebox maker Patton Music Co., has nearly doubled in size to 21 stores in five years, said Gene Taylor, district manager in Bakersfield. Patton began opening the stores as its sales of cigarette vending machines declined, he said.
The rise of cigarette specialty shops has not gone unnoticed by tobacco companies.
Although they account for just a tiny portion of the market, discount outlets have grown to about 5% of retail cigarette sales, up from 2% last summer, said Peggy Carter, spokeswoman for R.J. Reynolds Tobacco Co. The leading sellers of tobacco products are still convenience stores, with about 48% of cigarette sales, Carter said.
However, discount stores are becoming common where "there is a larger number of lower-economic folks," Carter said. "They pop up . . . in places hit by unemployment, shrinking industries, that sort of thing."
For large tobacco companies, which dominate the country's $45-billion-a-year cigarette market, discount cigarette stores could offer distinct advantages, said Goldman, Sachs & Co. analyst Marc Cohen.
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