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 ...
“Once there are no smokers to eradicate, look for the government (followed by business) to go after caffeine.”
But God forbid anyone dare mention the health risks of homosexual behavior!
I do have to admit that it always struck me as peculiar that at CVS or any *drug* store, folks could buy cigs at the front counter, and could pick up their cancer/CPD/sthma, etc. meds in the back.
You’re not invested in individual stocks are you?
In this crappy economy, $2 Billion is anything but inconsequential for ANY company. Let alone a low margin business.
Yeah...most any business in this economy wouldn’t say a thing about losing 1.5 to 2% of their expected revenue.
If that’s what they want, then good luck to them.
They’re a $123 BILLION company looking to drop $2 billion in sales of a low margin product with a high margin one that they project will generate $2 billion the first year (so net ZERO impact,aka breakeven) and then grow revenues in the following years.
Sorry, the more I read about this the more I find it to be a very, very smart business move on their part.
I had another thought. What would happen if a pharmacy refused to sell morning after pills?
Also, it's worth noting that the product they are dropping is not only low-margin, but also declining. On the whole, fewer people are smoking (and, fewer younger people than older people), and those who smoke are smoking less. That has been the trend for decades, and there's no reason to think it will reverse.
And, the product they are adding/expanding (low-cost, basic medical consultation) is a growing market that will only grow more as health care costs continue to increase.
Even if the immediate impact is zero or even slightly negative, this is a long-term win-win business move by CVS.
I go to CVS to buy my cigarettes. Do not get my prescriptions there or buy asprin. They have the kind I like at the best price.
I don’t care if they stop selling them, what I do care about is the phony it’s about health. If that was true they’d stop selling half the crap in their store.
I reserve the right to revise and extend my remarks.
Upon further review, the Usurper in Chief issued a congratulatory message to CVS within minutes of this decision being announced.
Clearly there was collusion involved. And probably coercion. I suspect CVS is going to jump to the head of the line for Obamacare reimbursement payments now.
1. The markets in general are down a bit today.
2. Small one-day fluctuations in stock price mean NOTHING. This is a long-term move on the part of CVS.
Up here in Ontario Canada the government passed a law banning cigarette sales in drug stores years ago. Someone asked me to get some cartons of cigarettes from Costco up here and I puzzled since there is a pharmacy as part of the Costco stores up here so how they could sell them. What they did was put them in a caged room with black drapes hiding their very presence in the separate tire department so technically they did not taint the main section of Costco where the prescriptions were dispensed. Ingenuity I tells ya.
I would wager that any moves from CVS and Coca-Cola in regards to the stock price will have a high correlation from here on out.
KO kowtowed to the govt instead of shareholders and shareholders got screwed.
This will be no different.
+1
The stories on the stock sites are all focused on the loss of revenue, with scant mention of that lost revenue being replaced with an equal amount of revenue from the new health services that will be offered.
So we’re seeing a dip due to initial knee jerk reactions. Totally unheard of by Wall St traders, I know ... (/sarc)
Progressive Costco sells evil tabaccy?
OMG!!!
There are actually very few freedom loving conservatives on FR, especially when it concerns something they personally do not like.
If CVS wants to quit selling cigarettes that is certainly up to them but don’t give me the crap about it being for the health of their customers. Let me know when they move the candy counter from the front of the store so children can annoy their parents to buy them candy while they’re waiting in line.
They should quit selling any food that is bad for you. Maybe they should sell nothing by drugs and water.
We’re on exactly the same page; see my earlier postings on this thread.
Doubtful. Totally different sectors. There will of course be a general correlations based on overall market factors, but that's it.
KO kowtowed to the govt instead of shareholders and shareholders got screwed.
Please explain exactly how the anti-obesity ad has "screwed" KO's shareholders. Be specific. Thanks.
Dow down 0.52%
CVS own 1.65%, three times as much.
Not a coincidence.
Of course it’s not being done for the health of their customers.
It’s being done so they can reap the revenues created by the synergies of being a pharmacy that has in-house health clinics. They can, functionally, create their own business (even if there are conflicts of interest involved)
Everything else is spin.
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