CVS not only sold cigarettes, they were one of the lowest priced sellers in the market, even taking sales away from convenience stores. It is likely the total loss in sales will be greater than just the cigarette lost sales. As the low price leader, consumers select CVS for their smoking needs and while in the store purchase other items as well.

Unless Walgreens takes the same position, they will have a sales gain. Consumers are addicted to cigarettes and will purchase them wherever they can, at the lowest price. This will not have any effect on overall cigarette sales.

Gutsy move, I’d say. They are positioning themselves as a health and wellness leader, to the detriment of their own finances. They will probably take some flack from shareholders, but it says they stand for something other than just trying to make a profit.

There is no reason for anyone to smoke. Smoking will hurt or kill every user. I salute CVS for this bold move which will allow it to claim the moral high ground in a very competitive marketplace. That said, I wonder whether this move will cause more consumers to shop at CVS and how much business the chain will lose from smokers taking their business elsewhere.

Obviously, this was not an easy decision. Tobacco sales generate visits, sales, impulse purchases, margin; not to mention the significant support (Advertising and Promotion dollars) from tobacco companies.

However, if CVS is going to position itself as “your health and wellness provider” then the decision, despite its potential short term negative effects, should eventually provide a significant differential advantage.

Positive or negative for results, it’s the right thing to do. I have never understood how chain drug stores could rationalize the sales of tobacco (and alcohol too, really). I mean, you’d never find either at a vitamin shop. I don’t expect the company to go completely overboard and stop selling sugar, etc….but cigarettes were sort of a no brainer.

So all things considered, it’s a very good move.

While others talk about the responsible citizenship, potential revenue loss and store image, I’ll focus on the efficiency impact. Without cashiers having to find and grab tobacco products for shoppers at checkout, lines may move more quickly and result in more satisfied customers in general. That could be another competitive advantage for CVS.

This is a great position for a company that is focused on health and wellness. Whatever short-term financial impact it has, I think it will help them in the long run and they will be seen as a leader in the space.

It will be interesting to see what the competitive response is the likely winner is the mom and pop shops that will pick up these tobacco sales and footsteps

As a former smoker, I can say that there will be a secondary loss of revenue from other products purchased from shoppers who went to buy cigarettes. So it’s more than the tobacco sales loss.

That said, good for them that they’re taking a stand, and I’m selling my CVS stock.

I’m glad in some ways that they did it, but it will obviously result in sales to smokers lost to competitors. And I don’t see more non-smokers shopping at CVS, versus, say, Walgreens, as a result. Wishful thinking if you believe otherwise.

Most effective thing would be to double the tax on cigarettes and put the revenue into healthcare. Smokers are responsible for a disproportionate percentage of healthcare costs, so I’d be in favor of making them pay for it. Net-net, CVS will get some warm fuzzies out of this, and some nice PR points, but it will be a financial loser.

Kudos to Larry Merlo and CVS! It’s a great move and a gutsy one.

My thought is that it will hurt them measurably beyond the $2B for some time to come. Lots of people pick up secondary items along with their smokes or get their cigs while picking up prescriptions. Those people will likely leave for competitors and it will take a while for replacement sales to catch – possibly years.

Maybe Walgreens will drop foods containing sugar in a counter move?

It has always struck me as strange that a pharmacy would be selling cigarettes.

I am sure CVS considered all the pros and cons quite seriously. The fact is cigarettes generate very little margin. The real value is the traffic and additional sales that traffic may generate.

I would not give them credit for making the “right” decision as far a health goes. They sell processed foods, sugared soda, candy, et. al. But, I will give them the benefit of the doubt that this is the right business decision. We will find out in a year or two. If it doesn’t help the bottom line, somebody will be fired.

CVS is making a good long-term decision. With the way the world is changing and the way many people are focused on this “health” thing, more and more large retailers will stop selling smokes. Down the road we will have a weed store and a tobacco store and a sugar store….since yesterday we noted that the binge on sugar is not healthy!

Change like this becomes an opportunity for CVS.

I applaud the courage CVS has shown with this decision. As a provider of wellness products and services, this move will better align the company’s mission and purpose to how it operates as a retailer. Our firm refers to this as brand authenticity, and I’ll bet CVS customers will react favorably to this announcement.

As drug stores add more and more features like Minute Clinics, it’s refreshing to see one to step out and make a decision like this. Interestingly, the first comment I saw on the topic was questioning whether they would likewise stop selling alcohol….

Bravo to CVS! As Al already mentioned it is a “gutsy move” indeed. Any time you purposely take away a steady revenue stream representing nearly 2% of revenues, you are making a bold statement (or others might call you crazy). While in the short term it will have a detrimental effect on their revenue (they claim it won’t impact 2014 earnings), over the long term it will enhance their competitive position overall. CVS is in tune with what it takes to be a winning brand in today’s world: clear, authentic and responsible vision driving consistent and transparent business (and product) strategies and execution in the store and engagement with partners, employees, and customers. According to their investor relations material, CVS touts itself as “a pharmacy innovation company” that is “reinventing pharmacy to offer innovative solutions that help people on their path to better health” and “improving health outcomes.” In that context, the decision was maybe easier to make than expected. They are making their assortment decisions in line with their aspirational vision and branding. It… Read more »

Great for image if you support not smoking. Poor for image if you have made the decision that you want to smoke.

CVS has made a decision about who they want to serve. It is now up to those people who CHOOSE to smoke to make the choice of where they want to spend their money.

Is it right or wrong? That depends on what side of the fence you are on.

Good for them! And now they can focus on the healthy lifestyle business. Cancer survivorship and prevention relies on smoking cession, a healthy diet and an appropriate body mass index, exercise, stress management (that includes figuring out the new reality, the hit on finances, work, family and self image), sleep hygiene, early detection, social support, and some more. Each has its own set of solutions – and there is probably an omnichannel model that can make these products available (even on a subscription basis). There is much to learn and so much to do – a very tough job for someone in that moment – yet we have cancer and other chronic diseases where we basically tell the patient – good luck figuring it out. America is so great at acute care but stumbles on chronic care. CVS hopefully will follow-up with solutions in these areas. Why is it that cancer patients need to visit stores to pick up anything or figure out what to buy? CVS can have a Amazon/Google express equivalent. Do they… Read more »

This is good news for the health of many, not to mention CVS’s image. However, I think that there may be unintended consequences – namely, that this will help fuel the black market in untaxed cigarettes.