Newsagents' chain hits pounds 100m jackpot

Lottery windfalls: One company reports massive increase in turnover as worries grow over gap between haves and have-nots
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The National Lottery is creating winners and losers among Britain's newsagents and corner shops. Figures released yesterday by one newsagency group have added to growing concerns that those retailers who have been granted lottery franchises are enjoying improving sales while those who have been unsuccessful are disadvantaged.

T&S Stores, which trades under the Supercigs and Dillons convenience store names and is particularly strong in the West Midlands, said it is taking pounds 1.4m a week in lottery ticket sales. It has lottery terminals in 318 of its 700 stores and expects combined sales of the weekly draw tickets and the Instants scratch cards to reach pounds 100m in the lottery's first full year.

The figures are the most bullish to emerge from lottery vendors. Larger retailers such as WH Smith and Woolworth's have said the lottery has had a broadly neutral effect on their performance. Supermarket groups such as Sainsbury and Tesco refuse to release figures on their lottery sales.

Jim McCarthy, chief executive of T&S, said: "Clearly the lottery has had a significant effect on our business and we are looking for terminals in more stores." He added that sales of other products such as confectionery were higher in outlets which sold lottery tickets than in those which did not.

Trevor Dixon, of the Association of Convenience Stores, said: "It is a case of the haves and the have nots. The lottery has given a sales boost, some might say even a lifeline, to those who have it, but what about the others?"

Retailers make 5p profit for every pounds 1 lottery ticket sold. Camelot, the lottery operator, awards franchises on the basis of location, customer numbers and size of store. It has awarded 25,000 franchises so far with 10,000 more to follow.

However, some retailers have found the lottery a mixed blessing. WH Smith experienced problems early on when large queues formed on Fridays and Saturdays, the two days which account for 80 per cent of lottery ticket sales. Superdrug and Woolworth's also both had early difficulties.

T&S specialise in lower price newsagents and convenience stores, with many located in less well-off areas. There have been concerns that those on lower incomes are spending a higher proportion of their incomes on lottery tickets.

The profits from the lottery are enabling the company to cut prices on other goods. T&S is looking to cut the price of tabloid newspapers such as the Sun and the Daily Mirror by around 5p. "Our customers love a bargain. We intend to give it to them," Mr McCarthy said.