Tobacco companies are exaggerating the need for small retailers to sell cigarettes and the impact it has on footfall and profits, an anti-smoking charity has claimed.

Action on Smoking and Health (Ash) said corner shops made an average profit of just £242 a week on tobacco products compared with £2,611 from everything else they sell - or less than 10% of their total weekly profits.

Retailers' average profit margins were just 6.6% for tobacco products compared with 24.1% for all other products, the charity's study with the National Addiction Centre at King's College London found.

The report said the fast decline of tobacco sales meant that 79% of all small retailer transactions did not include the purchase of tobacco products.

A survey of 591 local newsagents included in the report found that 69% "acknowledged that they do not make much profit from cigarettes compared to other products".

Newcastle-based small retailer John McClurey, who has been a member of the Ash Advisory Council for the past four years, said: "I have little choice to sell tobacco as many of my customers still smoke. But tobacco makes me very little money while tying up plenty of cash in stock. Tobacco is a burden to me.

"The decline in the market, the disappearance of cigarettes behind gantry doors and the shift to plain packaging have made the traditional approach to selling tobacco out-dated. A better alternative for retailers is to reduce stock, shift the gantry and free up space for products that actually turn a decent profit."

Ash chief executive Deborah Arnott said: "Nearly half (45%) of smokers buy cigarettes from corner shops, so for the tobacco industry it is essential that it puts a lot of effort into persuading retailers to maintain the profile of tobacco sales in those stores.

"Tobacco is a high-cost, low-profit product and money spent on tobacco is money not available for other more profitable purchases.

"Our report invites retailers to see the long-term decline in smoking as an opportunity, not a threat."

MP Bob Blackman, of the All-Party Parliamentary Group on smoking and health, said: "This report questions the core messages promoted by tobacco manufacturers that tobacco is essential to retailers' success.

"I hope that the findings will support and encourage small retailers to consider whether the traditional approach to selling tobacco in small shops remains in their best interests.

"A new approach to selling tobacco will benefit our corner shops, and ensure their continued place at the heart of our local communities."

Tobacco Retailers' Alliance spokesman Suleman Khonat said: "This report is flawed in its methodology and findings. Simply basing an entire view of a sector on a survey of 600 retailers out of 35,000 UK shops who sell and rely on tobacco is unsound.

"On average, shoppers that buy tobacco will buy on average a further £5 worth of goods during the same visit. The annual revenue for one convenience store from a single tobacco shopper is £2,473, compared to £1,020 per year from a non-tobacco shopper. Without tobacco these additional purchases and footfall would simply not occur.

"Retailers sell tobacco because they are giving their customers what they want, with recent research showing 90% of small retailers believe that tobacco is an important product. The fact remains that tobacco makes up around of 40% of turnover in many small stores whilst 39% of convenience store shoppers are smokers."