Smoker Friendly: From Humble Beginnings to Leading Tobacco Retailer

In 1997, he opened his first store in Parkersburg, W.Va. The second store opened six months later and the third store five months after that. Soon, he was opening stores at the rate of four to five per year.

“I recently thought about how we did it but the answer is that we just kept going and didn’t look back,” Norman says. “It was a lot of travel and a lot of hours worked but it was also a lot of fun. Some of the people who helped us get the business started are still with us today.”

The chain is now 40 stores strong and employs 160 people. The company generated revenue of $64 million last year. Smoker Friendly exclusively carries its own private-label brand that includes products such as cigarettes, cigars, smokeless tobacco and pipe tobacco, as well as tobacco accessories, such as lighters, cigar cutters, cigarette rollers and cigarette tubes.

Norman’s kids both work at the company now and they are “pretty much running things,” he says. His daughter Regan Bartley is marketing director; his son Ryan Norman is operations manager.

Under their leadership, Smoker Friendly has branched out into selling alcohol by acquiring 12 tobacco outlets that sell beer and wine. Now nearly all of the stores carry beer and wine; nine stores also sell liquor.

The company has also gotten into selling e-cigarettes. “Tobacco cigarettes are still our bread and butter,” Bartley says. “But we want to keep our customers who are also switching to e-cigarettes.”

Growing Trend

E-cigarettes have become popular recently as an alternative to tobacco cigarettes. Their use, called “vaping” (in reference to their vaporizer mechanism), has become a growing trend among hipsters, particularly millennials, as well as others who see vaping as safer than smoking tobacco.

E-cigarettes come in different shapes and sizes, but most look like long cigarettes. The user inhales through a mouthpiece, which triggers a battery-powered heater that vaporizes liquid (with or without nicotine) in a small cartridge. Vapor is produced that looks and feels like tobacco smoke, but e-cigarettes do not contain tobacco.

California-based Kretek, which provides specialty tobacco products, accessories and general merchandise to distributors and wholesalers who serve convenience, smokeshop and tobacco discount retailers as well as other tobacco distribution channels, helped Smoker Friendly branch into vaping by partnering with the retail chain to ensure it has a wide array of high-quality e-cigarettes and vaping products to offer customers.

Smoker Friendly started carrying e-cigs in 2007. “We were a step ahead of the trend,” Bartley says. “E-cigs are an alternative that is so similar to regular cigarettes. An option like this hasn’t existed for smokers before. My prediction is that e-cigs are here to stay.”

E-cigarettes currently account for about 10 percent of the company’s total business. Tobacco cigarettes account for about half of total sales and those sales are slowing, but the considerably higher margins earned on e-cigarettes are making up for the decline in its core business, Bartley says.

“We’ve made sure e-cigarettes are merchandised correctly because it’s very important to the future of our business,” she says.

Smoker Friendly’s loyalty program – which is run through Outsite Networks – has been a strong contributor to the company’s success. Virginia-based Outsite Networks provides convenience store loyalty marketing, and Bartley credits Outsite’s marketing specialist Robert Farthing with pioneering efforts. “Farthing has been very helpful in introducing the loyalty program to this industry,” she says.

Established Parent

Smoker Friendly is a family business in a corporate sense, as well – the stores owned and operated by the Norman family are franchises of Boulder, Colo.-based Smoker Friendly International.

The parent company operates 90 corporate-owned stores in Colorado, Montana, Nebraska, Utah and Wyoming. Another 850 stores in 38 states are operated by franchisees, including the Norman’s. Smoker Friendly is the largest cigarette and tobacco store chain in the country. The privately held parent chain is also family owned. The majority of its dealer companies are multi-store operators.