Cigar Weekly

Cigar Weekly: How was the 1998 Retail Tobacco Dealers Show (RTDA) different from last year?

Linda Squires: For one thing it was bigger. There were more booths.

CW: Were they all humidor companies?

LS: Last year there were so many humidor companies that it almost made your sick. It was so overwhelming, that you found it impossible to keep an open mind. You quickly reached a saturation point.

What was really nice this year was were it was held (the Opryland Hotel in Nashville, TN). Very tall ceilings. Wonderful ventilation that pulled the smoke right up. I'm a cigar smoker, but I don't like the smoke in my eyes. It was really great.

The aisles were a little wider in the main showroom, so it made it very comfortable. There were actually some people who thought the numbers were down, there were less retailers attending. That wasn't the case. They just weren't crowded and had a little more room to walk around. (Editor's note: according to the RTDA there were 696 booths, 1100 companies, 6,000 people attending this year. 1997 numbers were not available, but were smaller.)

CW: What did you see new at the show, except for line extension?

LS: You saw new cigars. You saw line extensions. The problem was, as a group of retailers lumped together, we are all in a situation where we were over-inventoried, period. In 1997, we were just way over on our inventory. All of us were out of control. It took us almost all of 1998 to get those inventories under control. We still have brands on our shelved that we don't need or desire anymore. They found their way to our shelves during the period when the major distributors could not ship enough products. We were not able to pick and choose the cigars that we thought would best suit our customers. Now two years later, some of these cigars are still on the shelf and we don't need them. They never really took off. The main brands are now back.

We went into this RTDA show completely different than we were a year ago in our desire for new brands. It is unfortunate because the companies are in a situation where they need to sell new brands. They have all of this excess capacity. These guys are way able to produce more cigars than we can sell. Talk about changes in the marketplace. Two years ago, since they couldn't supply products, the manufacturers could not open new accounts. Now, because of the excess inventory retailers can't buy as many products as the manufacturer can supply. They have got to change their marketing technique. They have to open more accounts. They have to open more distributors. They have to get their products out of the warehouses and out of the factories.

CW: The big companies are now publicly traded adding to the pressure.

LS: They have more people looking over their shoulder that they didn't have. It is going to make them change. They are going to have to.

What happened to the little retailer? Suddenly the boom is over in terms of continued growth increases, which were just phenomenal for the last two-three years. That's done. We've had a little freezing or even a small decline all across the country. Everybody (retailers) that I talked to was down about 20% from last year. It just is what happened. We got to a certain point where we could no longer keep those increases. However, we have gotten to a real comfortable space. Better than 95, better than 96. Yeah, you are down, but you are down from the most phenomenal year you have ever had. It has taught us all to pay closer attention to our inventory. So going in to this show (1998 RTDA), I lot of people were not able to put in new lines that they would like to. They don't have the shelf space for it. So a lot of the new stuff, Cigar Montague, for instance, is just what you want in a new cigar, wonderful marketing and advertising plans. I looked at it and it is a natural. It is just a question of how many specials can fit on the shelf. When you have stuff on the floor, when you have stuff you can't fit on the shelf, you've got to move it out. If we have a brand that we bought 200-250 cigars, we carried it, we displayed and we decide don't want it anymore and we want to replace it with something else, we will take the bands off and put it in a plain box and sell it at cost. We just want to get our money out of it, so we can buy something else.

CW: Thanks to Linda Squires for answering our questions.