Tobacco: How Smokers Get Hooked

As anyone who has ever walked a mile for a Camel (or any other smoke) knows, it often pays to keep going another block or two. In Atlanta, cigarette prices range from 28¢ a pack at cut-rate auto-service stations to 50¢ at downtown nightspots. Beverly Hills, Calif., smokers have been paying prices ranging from 32¢ to 45¢ in one four-block area. Chicagoans fork over anywhere from 35¢ to 50¢ for the same sort of butts. "It's all on the basis of what the traffic will bear," explains Los Angeles Tobacco Distributor Norbert Orens. "Cigarette prices are not pre-marked with a manufacturer's price, so it's easy."

While smokers get hooked by their habit in more ways than one, the blame cannot be put on manufacturers; they sell at a standard price, which has increased only 7¾% since 1958. Even federal, state and local taxes, which account for more than 60% of the price of cigarettes in some areas, are not responsible for the local price variations. The rub really lies with the retailers.

In some shops and drugstores, cigarette counters forgo profits to sell smokes as "loss leaders"—a tactic aimed at building customer traffic in general. At the other end of the price scale, the tactics are less subtle. In mid-Manhattan, not far from an A. & P. supermarket where shoppers buy regular-size cigarettes at 39¢ a pack, conventioneers visiting the Big Town can pay the big price at the New York Hilton newsstand—52¢ for nonfilter regulars, 53¢ for other kinds—and get some big lip too. "Because that's what we charge!" jeers the counterman at anyone who questions the tab.

Not surprisingly, fuming smokers are changing their buying patterns. Newsstands and small shops used to be the industry's No. 1 outlet, but now others are taking over the trade. Largely because they offer the best prices in town, supermarkets have increased their share of total cigarette sales in recent years to a commanding 35%. They are now the leading sellers of smokes.