A booming industry before the pandemic, could the vaping industry’s bubble burst causing store owners to close? Ben Wodecki finds out.
Ben Wodecki
Brian Scarlett likely didn’t expect to open his vape store amid a global pandemic. What started a year ago as a recommendation from his nephew to get into a lucrative industry, now sees his recently opened store allowing only a small number of customers in at a time, asking shoppers to wear a mask, and even close due to lockdowns.
Brian is one of the few brave entrepreneurs to take the plunge and create a business during the global viral pandemic. But entering an industry whose bubble may be set to burst could prove costly, as vape stores across the country are forced to close, while their behemoth supermarket and discount store rivals continue to trade, taking away potential revenue streams.
Adapting to adversity
Before the pandemic, the vaping industry was riding a wave of success. Some 3.6m British consumers used e-cigarettes, according to September 2019 findings from Action on Smoking and Health (ASH).
Despite being an industry in its infancy, in just a decade, vape stores were scattered across all of Britain's high streets, taking residence in vacant storefronts abandoned by brands and businesses now defunct following the last financial crisis.
Just three years ago, the UK Vaping Industry Association (UKVIA) estimated there were more than 2,000 stores in the UK, with that number “likely to grow exponentially over the next two to three years”.
This prediction could be set to disappear in a puff of smoke, however, as shops up and down the UK have been forced to shut three times, with the harshest lockdown enforced at the start of this year.
UKVIA Director General John Dunne said that the association has seen that previously predicted growth stall and suggested that several independent stores have bitten the bullet because they “frankly, just could not survive through the lockdown”.
“Unfortunately, those numbers are very sketchy at the moment - It's hard to put a finger on [the number of stores lost]”.
Dunne suggested the thing hitting stores the hardest is that the government opted to class them as non-essential. “We're extremely upset”, he said, arguing that stores should be given special status to remain open as they not only provide products, but they also provide specialist advice and services that people can't get elsewhere.
“Unfortunately, the government hasn't realised that”, he added.
Impacted but reacted
The “negative effect” lockdowns have had on speciality stores has affected sales volumes, Dunne suggested. But the UKVIA chief said his team have been very glad to see the vape industry adapt quickly, making full use of services like click and collect, and home deliveries.
“The industry is kind of dusting itself off a little bit and looking towards the future in a positive light. Many members of this industry are entrepreneurs and pioneers in spirit, I think it's going to take more than this pandemic to kind of knock them for six.”
Dunne said UKVIA has seen a huge growth in online vape sales and that some its member stores have a very robust online presence as well.
He added that members of the association who are large online resellers have also seen huge sales growths, but noted that when stores reopened following the close of the first UK lockdown, online growth declined, but those stores still saw a bump in what sales would normally be.
Dunne continued, “But it is encouraging that over the last month or so, I've actually seen through my own social media feeds and various articles that some new stores are actually opening.”
One such store is Scarlett Vapes. Located aside Clockhouse train station in South East London, the store only opened in the second half of 2020, but owner Brian explained that his research showed opening a vape store to be a viable business opportunity.
While he couldn’t possibly have predicted the predicament his store would be in upon first opening its doors when planning to purchase it a year prior, the entrepreneur explained that the second lockdown proved to be difficult for his young store.
“This is my first six weeks since I’ve been here now, and it’s been tough. I’ve not been getting the footfall that I was expecting to get before lockdown. But I’m feeling very positive about the business and the industry and I think once people know I’m here, the business will come.”
While the pandemic has been rough for most businesses, Brian revealed that shoppers have been asking him why he opened up a business in this climate, but that he always responds, “sometimes you’ve got to take opportunities”.
“This second lockdown has made things a little more difficult,” he said. “We had the government’s help and several trusts support the industry, but it’s not enough for local businesses to survive because everyone is working from home.”
Brian explained that at the start of the first lockdown, vape store owners he had spoken to “weren’t able to provide any click and collect services initially” but that they took the steps to move their businesses online and saw “a big rise in sales as everyone was going online and buying their products”.
Recouping revenue
Because shops have been forced to shutter three times now, store owners have had very little time to try and recoup a considerable amount of revenue.
One store in South East London, 53 Vape, is selling Chinese-made electric scooters. The shop brazenly advertises the Xiaomi Mi M365 electric scooter, selling it for £100 less than what e-commerce giant Amazon is selling them for.
And diversifying their product portfolios is something Brian has done at his store. Before the pandemic, a popular florist across the road sold Christmas trees during the holiday season. It has since shut down, leaving a Christmas tree-sized hole in the local community.
But Brian opted to take advantage and sourced some Christmas trees all the way from Bedfordshire so local people would still be able to buy their traditional trees.
The vape store owner said he bought the trees because he wanted to do something nice and “give something back to the community”.
But attempts to rebuild revenue aren’t limited to non-vaping products. Cannabidiol (CBD) products are all over the retail world right now, and the vaping industry is no exception.
But instead of selling lozenges, oral sprays or massage gels, some vape stores are selling edible CBD gummies and treats, oils, and vape liquids.
The vape store owner said he bought the trees because he wanted to do something nice and “give something back to the community”.
But attempts to rebuild revenue aren’t limited to non-vaping products. Cannabidiol (CBD) products are all over the retail world right now, and the vaping industry is no exception.
But instead of selling lozenges, oral sprays or massage gels, some vape stores are selling edible CBD gummies and treats, oils, and vape liquids.
CBD can be used as pain relief, as well as assist those suffering from anxiety or nausea. The area is becoming extremely popular, with The Observer’s Tim Lewis describing it as “2019’s avocado toast”.
Dunne suggested CBD vaping “is one of the best ways that people can ingest the product”, adding that UKVIA has seen several of its member stores taking on such products.
“The CBD industry itself is in its infancy”, Dunne said, adding, “It may help revenue in vape stores, but it's certainly not replacing the revenue that they were losing from vaping customers going elsewhere.”
Beyond Christmas trees
Upon catching up with Brian at the turn of the year, he outlined his plans on potentially expanding on his outside the box thinking in 2021.
He said, "Essentially, it's just a shop. So I'm not just stuck selling just vapes."
"I can have some seasonal things to bring awareness to the shop."
Despite reduced footfall, he explained that over the three months he's been trading, each month seems to be getting better.
"Because I'm quite new, I need to build my client base. It's just finding ways to actually get awareness out there. And I feel like once I've done that, hopefully, I should be fine."
However, the government has since enforced a third lockdown in early 2021, with Brian continuing sales through call and collect.
More support needed
Both Brian and UKVIA have called on the UK government to provide further support for the country’s vape stores during this trying time.
The call for vape stores to obtain special status has been heard, with All-Party Parliamentary Group for Vaping chair Mark Pawsey MP backing the demand for further support.
“Given its vital role in smoking cessation, even when compared to Nicotine replacement therapy (NRT), the case for vaping’s essential status is growing ever stronger.”
Pewsey, the MP for Rugby, stressed the need to keep stores open to safeguard the public’s health.
He said, “I have seen first-hand how UK vaping has risen to every challenge this year, with new safety measures, business practises and routines; every option which allows us to aid consumers is explored. The passion for helping people in this industry is unrelenting, no smoker looking to quit is on their own.
“However, with Government help, we can do even more, because for many people the support of a face-to-face experience is vital. That is why I have written to [the Business Secretary] Alok Sharma and Paul Scully at Department for Business, Energy and Industrial Strategy (BEIS), as well Jo Churchill at the Department of Health and Social Care, to urge the Government to reconsider vaping’s status. I have reminded them that more than 200 people die in the UK every day from a smoking-related illness, and that harm-reduction alternative needs our full support”.
And the political backing doesn't end there. Stockton North MP Alex Cunningham personally asked the Secretary of State for Health and Social Care, Matt Hancock, whether the government would reconsider the plan to force stores to close. At the time of writing, the government is still considering the proposal, but no news is good news.
Manufacturing and Compliance Director at vape store VPZ, Doug Mutter, stressed the need for the support given the recent Stoptober programme, aimed at helping traditional smokers quit.
“If the Government does not grant essential status to vaping the impact on sales from stores could be as much as 45%-50% down. That is a significant challenge for the entire sector and an increasing concern for the high street. As people prepare for the busy Christmas shopping period – and hope to be back out in bricks and mortar stores – we don’t want a situation where the industry can’t respond and be there to provide the service that so many still need.”
While franchisees with several stores may survive, independently owned vape shops may not survive a second, uncertain and unforgiving year.
Support from the UK government may be the only thing preventing stores like Brian's from disappearing in a puff of smoke.
What do you think? Should the government allow vape stores to open during any further lockdowns? If not, what kind of support should it provide? Comment below.
Author
Ben Wodecki is a reporter for WN. You can follow him on Twitter @benwodecki @NewsWhatever
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