Tobacco and Smoke Shops NAICS 459991

Dec 29, 2025 - Faster Growth Forecast

• The US tobacco and smoke shops industry is projected to grow at a CAGR of 4.69% between 2025 and 2029, faster than the overall economy’s projected growth, according to an updated 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. The forecast said retail spending could soften with the growth of spending on consumer services but noted that consumers have maintained strong spending on goods even as costs on some services have risen. Real disposable income is being limited by a slow rise of employment and higher consumption prices, with a projected increase of real disposable income of 1.8% in 2025 and 1.6% in 2026. The report noted that some shifts in consumer behavior persisted in 2025, including increased online shopping.
• Tobacco and smoke shop retailers head into 2026 navigating a cautious consumer landscape, as both major sentiment indicators weakened in December. The University of Michigan Index of Consumer Sentiment ticked up to 52.9 but remained nearly 30% below last year, with durable goods buying conditions falling again and 63% of consumers expecting unemployment to rise. The Conference Board Consumer Confidence Index declined to 89.1, driven by a 9.5 point drop in the Present Situation Index, while the Expectations Index stayed at a recession signaling 70.7 for the 11th straight month. The trends suggest consumers are prioritizing lower cost, habitual purchases over big ticket discretionary spending. Tobacco and smoke shop retailers may see steadier demand as routine consumption patterns persist despite broader economic uncertainty. Easing inflation and improving expectations for future finances offer some stabilization heading into 2026, though job and income concerns will continue to influence purchasing behavior.

• According to AZPM, Arizona raised the legal age to buy or possess tobacco products from 18 to 21 in September 2025, aligning with federal law passed in 2019. This change impacts tobacco and smoke shops statewide, creating a uniform compliance standard and reducing confusion among retailers. SB 1247 covers all tobacco-related items, including cigarettes, cigars, vape products, and paraphernalia. Retailers face Class 3 misdemeanor charges for selling to underage customers, while possession or distribution by individuals under 21 is now a petty offense. The law includes a military exception, though enforcement remains subject to base regulations. For smoke shops, the update reinforces age-verification protocols and may reduce youth access, particularly to vaping products, which are used by approximately 20% of Arizona high school seniors.
• According to Tobacco Reporter, the US Food and Drug Administration (FDA) is seeking public comment on a tobacco retailer training program requiring several new elements, including written tests for employees selling tobacco. FDA estimates that the proposal will affect 79,700 retailers nationwide, which creates an annual reporting burden of nearly 2 million hours and 191,000 hours for recordkeeping. Elements include written tests for employees selling tobacco products, with refresher training annually and records of training being kept for four years. The FDA noted that about 75% of tobacco retailers already have some kind of age and identification training program in place. According to Grace R. Graham, deputy commissioner for Policy, Legislation, and International Affairs, some retailers will already meet the new training requirements, some will need to update their training, and some will have to implement training programs for the first time.