Tobacco and Smoke Shops NAICS 459991

Jun 26, 2025 - Cigar Retailers Improve in Q1

• A recent survey by the Premium Cigar Association showed improvement for retailers, with 51% of retailers performing better in 2024 compared to 2023, 29% performing the same, and 20% performing worse. The First Quarter 2025 survey also revealed that 67% of cigar manufacturers said they performed better in 2024 compared to 2023, with 17% of manufacturers performing the same and 17% doing worse. Cigar manufacturers were asked to list their top concerns, which included rising costs, competitors over-discounting products, connecting with retailers on a timely and regular basis, finding quality sales help, and tariffs and complexity of different state taxes. Retailers were asked what they would like to communicate with manufacturers to help sell their products, and the most common answers were controlling moderate price increases and shipping, limiting high-end offerings and creating more economy cigars, better education/communication, fixing supply issues, and focusing on core lines and not “what’s new.”
• According to a report in CFO Dive, consumer sentiment, an indicator of discretionary spending, rose in June in large part due to a lull in the tariff war. The final index of consumer sentiment from the University of Michigan grew 15.9% in June 2025 from the previous month, as the Trump administration put some tariffs on hold against major US trade partners. Year over year, the index of consumer sentiment was down 11.3%. An index measuring consumers’ expectations for the future was up 21.9% from the previous month, but was down 16.1% year over year. According to survey director Joanne Hsu, “Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed.” Hsu noted that consumers’ views of business conditions, personal finances, buying conditions for big ticket items, labor markets and stock markets all remain below six months ago.

• The US tobacco and smoke shops industry is projected to grow at a CAGR of 4.55% between 2025 and 2029, faster than the overall economy’s projected growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The retail and wholesale sectors are driven by consumer spending, along with expenditure by businesses and government. A factor that may limit consumer spending is higher tariffs on consumer goods. On a positive note, lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer if prices rise due to tariff implementation. The forecast said retail spending could soften with the growth of spending on consumer services, but noted that consumers so far have maintained spending on goods even as travel and live entertainment spending has risen.
• Tobacco and smoke shops are preparing for price increases on cigars due to new US tariffs on imported goods, according to a report in Cigar Aficionado. In 2024, the US imported more than 400 million handmade cigars, with 99% of them being rolled in three countries: Nicaragua (64%), the Dominican Republic (24%), and Honduras (15%). These countries are now subject to tariffs imposed by the US, 10% on imports from Honduras and the Dominican Republic, and 18% for market-leader Nicaragua. According to the report, industry experts estimate that tariffs will increase prices from 50 cents to $2.10 more for each handmade cigar in a zero-tobacco tax state. This change means an estimated additional $12.50 to $52.50 or more per box of 25 cigars. Most likely, consumers will see prices rise in June after retailers work through their existing inventory.