In February, CVS Caremark made an unexpected announcement
: by October, its stores will no longer sell tobacco products. The news was so significant, even President Obama issued a statement applauding the news, hailing the move as setting "a powerful example" that will help "reduce tobacco-related deaths, cancer, and heart disease, as well as bring down health care costs."
As of midnight on Tuesday, all 7,700 CVS locations nationwide will no longer sell tobacco products, fulfilling a pledge the company made in February, as it seeks to reposition itself as a health care destination. The rebranding even comes with a new name: CVS Health.
I was eager to see how much the shift affected the company's bottom line -- CVS estimated a loss of about $2 billion in annual sales by removing tobacco products from its shelves -- and so far, the results have been relatively promising. Jason Millman reported
this morning, "CVS reported last month that front-of-store sales dropped .4 percent in the second quarter, an indication of lower tobacco sales as the products have been gradually removed from stores over the past few months. But the company reported second-quarter profits rose 11 percent, particularly on the strength of its pharmacy business."
The next question has been evident since February: what do CVS's competitors intend to do next?
Larry Merlo, CEO and president of CVS Health told Politico, "They need to, quite frankly, go through the same process that we went through in terms of asking the hard questions."
...Walgreens in a statement maintains that with only 4 percent of overall tobacco sales, retail pharmacies would have "little to no significant impact" on tobacco use if they banned the sales. Walgreens said it is committed to reducing the smoking rate and offers a range of tobacco cessation products and services. "We believe that if the goal is to truly reduce tobacco use in America, then the most effective thing retail pharmacies can do is address the root causes and help smokers quit," company spokesman Jim Cohn said. Rite Aid spokeswoman Ashley Flower said her company "will continue to evaluate the products and services we offer in our stores as we move forward as a company."