CVS Caremark is taking a huge risk by deciding to stop selling cigarettes and other tobacco products by Oct. 1 at its 7,600 pharmacies and stores.
Larry J. Merlo, president and chief executive of CVS Caremark, said in a prepared release Wednesday: “Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health. Put simply, the sale of tobacco products is inconsistent with our purpose.”
That makes a lot of sense. However, the company notes that it will lose $2 billion in revenue annually because of the decision.
That’s not small change. Also consider that people wanting cigarettes or other tobacco products usually pick up medicine, candy bars or booze while in drugstores.
The loss of that revenue also will bite hard on CVS’ bottom line. It’s also not as if CVS Caremark doesn’t have strong competition.
The tobacco sales that CVS Caremark takes a pass on will definitely go to always nearby Walgreens pharmacies. Yet for now, CVS Caremark is making headlines with its decision.
Even President Barack Obama, who has had difficulty quiting his own smoking habit, weighed in.
Obama said in a prepared statement Wednesday: “I applaud this morning’s news that CVS Caremark has decided to stop selling cigarettes and other tobacco products in its stores and begin a national campaign to help millions of Americans quit smoking instead. As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today’s decision will help advance my administration’s efforts to reduce tobacco-related deaths, cancer and heart disease as well as bring down health care costs — ultimately saving lives and protecting untold numbers of families from pain and heartbreak for years to come. I congratulate — and thank — the CEO of CVS Caremark, Larry Merlo, the board of directors and all who helped make a choice that will have a profoundly positive impact on the health of our country.”