Hello everyone.
Today, I’d like to talk about cigarettes in Japan.

Currently, cigarettes in Japan usually cost around:

👉 600 yen per pack

Whether that feels expensive or cheap depends on your country, so I won’t judge that here.

However, if we use Marlboro as an example, the price changes over time are quite interesting:

In other words:

👉 The price has nearly doubled over the past 30 years.

And this is not just Marlboro.
Almost all cigarette brands in Japan have followed the same trend.

Very few everyday products in Japan have increased in price this dramatically.

So, Do Convenience Stores Make Good Money from Cigarettes?

The answer is simple:

👉 Not really.

Many people assume cigarettes are highly profitable because they are expensive products and sell steadily.

But in reality:

👉 The profit margin on cigarettes is very low.

For convenience stores, the margin is roughly:

👉 Around 10%

That means most of the price goes elsewhere.

And a large portion of that money is:

👉 Tax

In other words:

👉 Higher cigarette prices in Japan are largely the result of tax increases.

Over the years, the Japanese government has repeatedly raised tobacco taxes.

One reason is probably quite simple:

👉 Raising taxes on cigarettes is politically easier than raising taxes on many other products.

Because smoking is strongly associated with health risks, governments can justify higher tobacco taxes more easily.

Then Why Do Convenience Stores Sell Cigarettes?

Even though profit margins are low, cigarettes still have value for convenience stores.

Why?

Because cigarette smokers often buy other things at the same time, such as:

In other words:

👉 Cigarettes help bring customers into the store.

From a business perspective, cigarettes are often viewed more as a “customer traffic product” than a highly profitable item.

Alcohol is somewhat similar because it is also heavily taxed.

However:

👉 Cigarettes are taxed much more aggressively.

Price increases for tobacco products have been especially noticeable in Japan.

I may talk about alcohol sales in Japanese convenience stores another time.

That’s all for today!

Japanese Alcohol at Convenience Stores (Part 1)
A look at alcohol culture and heavily taxed drinks sold in Japanese convenience stores.
Japanese Beer at Convenience Stores: Why Are the Prices So Different?
Why beer prices in Japan vary so much and how tax systems shaped the industry.
The Future of Convenience Store Owners in Japan
The difficult business realities facing convenience store owners in modern Japan.