Background California’s tobacco tax increased by $2.00 per pack in 2017. Although such increases are among the most effective tobacco control strategies, little is known about their impact from the perspective of corner store owners in low-income neighbourhoods with high concentrations of tobacco outlets.

Methods We interviewed 38 corner store owners and managers in San Francisco’s Tenderloin, the district with the city’s highest tobacco outlet density, 60–90 days following implementation of the tax increase. Questions focused on perceptions of the impact of the higher tobacco tax on their revenues, customers and tobacco company promotions. We used qualitative content analysis to identify, compare and reconcile key themes.

Results Most retailers reported a decline in cigarette sales, with customers buying fewer cigarettes, switching to cheaper brands or other products like marijuana, or trying to quit smoking. Retailers described challenges associated with running a small business and selling tobacco and concerns about selling a product that is ‘bad’ for customers’ health. Contrary to expectation, tobacco companies appeared to be offering few product promotions in this neighbourhood.

Conclusions Small, independent retailers’ concerns, about selling tobacco and about the health and well-being of customers, suggest that such retailers may be important allies in tobacco control efforts,particularly those focused on the point-of-sale.