Objective There is evidence that wide distribution of cigarettes contributes to smoking, and multiple commentators have called for a review of tobacco retailing. This study analyses retailers who stop selling cigarettes, why they do so, and discusses the implications for tobacco control.

Method An audit of tobacco retailers in the Australian state of NSW was used to identify retailers who had stopped selling tobacco, and they were then compared with current retailers to determine how many, and what types of outlets stop selling tobacco. Attempts were made to contact and interview all former tobacco retailers identified in three audited regions. In-depth interviews were conducted with 13 ex-tobacco retailers, or 31% of the subset of ex-tobacco retailers.

Results Low-volume outlet types were over-represented as a proportion of retailers exiting the market, and some had resumed selling within 18 months of the audit. Low profits were often cited as a contributor to stopping; however, in all but one case, the decision to stop selling was also influenced by a significant change in business circumstances—either legislative or other business changes.

Conclusions Few retailers stop selling tobacco while continuing in the same business, and those who stop disproportionately represent retailer types with low sales volume. The results suggest that legislative changes provide a window where retailers could be prompted to exit the market.