Posted on 02/05/2014 5:01:07 AM PST by Red in Blue PA
CVS Caremark is kicking the habit of selling tobacco products at its more than 7,600 drugstores nationwide as it focuses more on providing health care.
The nation's second-largest drugstore chain said Wednesday that it will phase out cigarettes, cigars and chewing tobacco by Oct. 1, a move that will cost about $2 billion in annual revenue but won't affect its 2014 earnings forecast. CVS Caremark leaders say removing tobacco will help them grow the company's business of working with doctors, hospitals and other care providers to improve customers' health.
(Excerpt) Read more at finance.yahoo.com ...
Pissing off 19% of your customer base is never a good thing, no matter how you cut it.
And for every person like you there's probably 10 who are saying this morning, "Great for CVS. I'm going to start shopping there."
This was a decision made by the CEO. I have no problem with it. No government involvement whatsoever. I am for smokers rights 100 percent, but I am also a person who believe that stores can sell what they want.
Very doubtful.
You're assuming they buy their cigarettes at CVS instead of a grocery store or convenience store. Really, who goes to CVS unless you're looking to fill a prescription or buy aspirin?
There are plenty of places still left to buy cigarettes and other tobacco products. And around my parts and yours, CVS and Walgreens, Rite Aid and grocery stores like Weis and Giant are way overpriced anyway; better to buy them at Sheetz and Rutters stores. And a lot of other big chain retailers don’t sell cigarettes anymore if they ever did; Wal-Mart, Target, Wegmans for instance and they still seem to do a booming business.
Around here in PA, as you must already know, you can’t buy wine or “spirits”, i.e. liquor except from “State Stores” (which are horrible BTW) and they don’t sell any tobacco products and except for a very few places, you can only buy beer by the case from “distributors” and most of them don’t sell cigarettes - beer and only beer. (And yes, this is sometimes why I do miss living in Maryland.)
But in recent years a lot of tobacco stores have opened and they not only sell cigarettes at discounted prices but also have a large selection of HQ cigars and pipe tobacco.
Why would a smoker even want to buy cigarettes from CVS? The last time I went there I stood in line what seemed like forever to get waited on. The first and only time I got an RX filled there, they screwed it up.
They will get the message loud an clear that CVS does not value their business, even if they do not purchase them there.
“The CEO decided to serve the interests of the govt instead of the shareholders. IT IS THE DUTY OF THE CEO TO BE MORALITY NEUTRAL.”
No. As others have pointed out, the CEO chose to expand a higher margin (the health clinics), at the expense of a low margin, commodity product. There is no evidence of govt pressure (if this was about govt pressure, it would have happened decades ago), and this is morality neutral.
Also, to the extent Coke’s stock has fallen, it has been largely due to falling sales. Soft drink sales in general have been down, largely because consumers have become more health conscious. Pointing to their obesity initiative as the source of the stock drop is a huge stretch.
I agree it's ridiculous. I think CVS here is trying to get PC publicity.
Hey, they sell narcotics at CVS. What's the problem with tobacco?
Doubtful.
Tobacco is just about the only product out there where there isn’t much resistance to levying additional taxes or imposing additional restrictions because it’s users/consumers are already beaten into the ground thinkingbtgat what they’re doing is bad.
And as others have said it’s also doubtful that anything more than a small % of tobacco consumers buy at a pharmacy vs buy at a convienience store or supermarket.
So looking at it from CVS’s perspective, where are they likely to reap the most profits going forward: in making pennies on the dollar selling tobacco products, or by plunking nurse practioners into all their stores who spend their days looking into ears and noses, running strep tests, etc at $50-80 per patient and then writing antibiotic or decongestant prescripts that are filled less than 30’ away?
I think Coke is following the trend, not leading it. I also think Coke is playing the long game. They likely know that soda sales are in a long term decline, and would like to capitalize on that to the extent they can. Remember, the Coca-Cola company sells a whole bunch of other beverages, including 2 or 3 bottled water brands.
It did on me. I don't smoke and I don't have a CVS near me, but my first reaction was still "Good for them".
It was enough of a consideration to actually state in the article that it will cost them $2Billion in revenue. I don’t call that inconsequential.
That is a good question, one that I don’t have an answer to. But I really don’t think the CVS decision was one of bowing to government pressure to stop selling tobacco and start selling marijuana (unless medicinal perhaps?) as it is a marketing ploy. CVS made a business decision to market its self as place to more oriented toward “health oriented products”, then of course I’m sure they will keep selling candy and snack foods. /s
Until the government outright outlaws tobacco, (and I don’t think they are going to do that any time soon given the tax revenues it brings in) then other retailers will be more than willing to keep selling tobacco products. May the better and more profitable business model win – that’s how capitalism works.
So may I ask you and a fellow Pennsyltuckian; what is your position on privatizing the sale of wine and liqueur here in PA?
And they make their purchases with food stamps as they proclaim their love for big government.
It's still marginally a free market economy and if CVS chooses to alienate a portion of their prospective patrons by going PC all power to them.
It matters not a wit to me.
damn where’s my h in “whit”
Here in Oklahoma tabacco prices are cheaper in Walgreens and CVS than any other retail outlet. That includes outlets run by the indian nations. The move by CVS will only drive smokers to Walgreens for both smokes and prescriptions.
Hope they don’t stop selling candy either. Especially after a holiday...their candy is always reduced.
Around our house, we don’t call’em Candy Very Soon for nothing.
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