This may not apply to the US: In my corner of the world, word on the street is that sellers of tobacco products make nearly no profit at all on it. Reason is that between sky-high taxes raising prices and anti-smoking propaganda lowering demand, sellers are squeezed out of a profit.
However, there still are a lot of smokers who would be less likely to visit your place of business if you stopped to stock tobacco products. So you continue to deal in it even though it makes you little money.
If a large player leaves a market like this, they drop a low-profit use of shelf space, but also lose smokers to competitors. In that position, the most desirable endpoint would be more bans on smoking, because less smokers mean less of an advantage for competitors.
Where I live when they passed an indoor smoking ban in the county, certain businesses near the county line were up in arms because smokers will drive an extra 5 minutes to go to a bar/restaurant where they can have a cigarette too.
There were bars that were in danger of going out of business because they couldn't get a waiver and enough of their customers were going elsewhere.
I'm not convinced that's enough to make a significant dent in business, especially if you balance it out with those who will be attracted by the idea that their clothes will not smell like smoke.
You have not considered another factor. The non-smokers who will stop going to an establishment when their smoking friends go somewhere else. Drinking is often a social activity.
Non-smokers who drink already have established places where they go. Those places will have done nothing to alienate them and cause them to change their habits. They'll keep going where they have been going because for them, nothing will have changed.
Bars and restaurants don't always operate with huge margins. If 15% of their customers decided to go elsewhere overnight, I have no doubt that it would cause serious problems.
Also I'm skeptical that these numbers account for the drinking smoker. If you're a bar goer you should be well acquainted with the archetype - the person who "doesn't smoke" but the moment they're inebriated they start hitting others up for a cigarette or four.
> You have not considered another factor. The non-smokers who will stop going to an establishment when their smoking friends go somewhere else. Drinking is often a social activity.
Yes. Selecting a place to go is like the old days of renting a movie with a group of friends: it's the most insistently intransigent who get to make the choice, and the nicotine addicts will falt out to refuse to accommodate the non-addicts.
However, there still are a lot of smokers who would be less likely to visit your place of business if you stopped to stock tobacco products. So you continue to deal in it even though it makes you little money.
If a large player leaves a market like this, they drop a low-profit use of shelf space, but also lose smokers to competitors. In that position, the most desirable endpoint would be more bans on smoking, because less smokers mean less of an advantage for competitors.