Background Widespread availability of tobacco has been shown to contribute to ongoing smoking and make quitting harder. This study investigates why some retailers in three Australian states decided to stop selling tobacco, others might stop selling and why others continue to sell in a declining market.

Methods A telephone survey of 4527 randomly selected retailers was conducted in August 2018 (response rate=72.4%). This study examines responses to open-ended questions in the survey probing retailers’ attitudes and beliefs regarding selling (or not selling) tobacco.

Results 27.3% of the sample sold tobacco, and 13.3% had formerly sold. Outlets that had stopped selling most frequently mentioned minimal profit and/or sales as the reason for stopping selling (27.7% across all states). This was also the most frequent reason why retailers said they might stop selling. Uniquely in Western Australia (the only state in the study with a fee-based licensing scheme), 12.5% of former tobacco retailers named tobacco licensing as the reason for stopping sales—the second most frequent reason in Western Australia. Of current sellers who were unlikely to stop, the potential to lose sales was the most frequently named reason (31.0% across all states).

Conclusion Retailers report being driven by the profitability of tobacco when deciding whether or not to stop selling, although only a small percentage discussed losing incremental sales if they stopped selling. An annual licence fee contributed to some retailers stopping selling, showing that a fee-based tobacco license can contribute to a decline in retail availability of tobacco.