CVS plans to stop selling tobacco products
Feb 6, 2014, 8:24 AM | Updated: 10:02 am
In this Wednesday, July 17, 2013 file photo, Marlboro cigarettes are on display in a CVS store in Pittsburgh. The nation's second-largest drugstore chain says it will phase out cigarettes, cigars and chewing tobacco by Oct. 1 as it continues to focus more on health care. The move will cost the Woonsocket, R.I., company about $2 billion in annual revenue. (AP Photo/Gene J. Puskar, File)
(AP Photo/Gene J. Puskar, File)
The nation’s second-largest drugstore chain is kicking the habit.
CVS has decided to stop selling tobacco products at its 7,600 stores nationwide by October.
CBS market analyst Jill Schlesinger said it’s a move to brand the chain as a health care company.
“This is a huge decision, and I think it really tells us the company is trying to align itself as part of a health care company,” Schlesinger said. “It’s hard to say a real focus on health care when I’m selling tobacco products.”
The reaction has been positive for the most part, and that surprised Schlesinger.
“There were so many people who were like ‘That’s great, that’s awesome,'” she said. “Maybe they have gotten some PR benefit, and maybe it’s also a sign of how important it has become to define yourself as a company.”
But Schlesinger said there are still plenty of people questioning the move.
“Critics will say, ‘Oh gosh what’s next? Are they going to stop selling sugary products?'”
The stock did take a hit when the decision was announced. Overall, according to Schlesinger, CVS is still in a good spot.
“They are trying to make a name for themselves,” she said. “Over the last year, the stock is up about 28 percent, and that’s better than the S&P 500. So in general I think that investors really did take the news in stride.”
CVS makes about $1.5 billion a year in tobacco-product sales. It believes it will lose about $2 billion a year because smokers buy other products in its stores.
Schlesinger said it’s possible the chain might make up some of those losses with new customers who like the company’s stand on tobacco.
CVS does not have any stores in Washington.
