Thursday, February 6, 2014
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CVS Caremark Plans to Stop Selling Tobacco Products
By Stacy Jacobson
WCIV-TV News 4
MOUNT PLEASANT, S.C. (WCIV) -- 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. There are 37 CVS stores in the greater Charleston area that be affected by the decision.
Former smoker Emily Brown thought it was a decision that made sense for the pharmacy chain.
"When I did smoke and when I did buy cigarettes at CVS, I thought it was an oxymoron sort of. I was like, 'Oh it's so funny they sell cigarettes here. This is supposed to be healthy,'" Brown said.
The nation's second-largest drugstore chain said Wednesday that it will phase out cigarettes, cigars and chewing tobacco by October 1, a move that will cost about $2 billion in annual revenue but won't affect its 2014 earnings forecast.
The move will not cost the company Elizabeth McKown as a customer.
"I shop at CVS all the time too and I was pretty impressed they were taking tobacco off their shelves," said McKown, a Columbia resident visiting her children in Mount Pleasant.
CVS Caremark leaders said removing tobacco will help them grow the company's business of working with doctors, hospitals and other care providers to improve customers' health.
"It will have an impact making cigarettes less available, particularly to the younger population," said Dr. John Ciccone, a cardiologist at Roper Mount Pleasant Hospital. "It was a voluntary move, which is something that takes a lot of guts to do."
CVS Caremark Corp. and other major drugstore chains have been adding clinics to their stores for several years now. Their pharmacists deliver flu shots and other immunizations, and those clinics also have been expanding the care they deliver. They now help people manage chronic illnesses like high blood pressure and diabetes.
CEO Larry Merlo noted that conditions like those are made worse by smoking.
"We've come to the conclusion that cigarettes have no place in a setting where health care is being delivered," he said.
The company declined to say what will take tobacco's prominent shelf place behind cash registers at the front of its stores. CVS Caremark will test some items and may expand smoking cessation products that are already sold near cigarettes.
CVS Caremark has been working to team up with hospital groups and doctor practices to help deliver and monitor patient care, and the presence of tobacco in its stores has made for some awkward conversations, CVS Chief Medical Officer Dr. Troyen A. Brennan said.
"One of the first questions they ask us is, 'Well, if you're going to be part of the health care system, how can you continue to sell tobacco products?'" he said. "There's really no good answer to that at all."
CVS Caremark competitor Walgreen Co., the nation's largest drugstore chain, sells tobacco, but Target Corp., another major retailer with pharmacies in its stores, does not.
Most independent pharmacies also do not sell tobacco, according to the National Community Pharmacists Association.
Several cities, including San Francisco and Boston, have considered or passed bans on tobacco sales in stores with pharmacies. Other places like New York City have sought to curb retail displays and promotions and raise the legal age someone can buy tobacco products.
On the flip side, discounters such as Family Dollar have started selling tobacco over the last couple years. They note that smokers make more frequent stops at retailers, and their customers are more likely to be tobacco users.
U.S. retail sales of tobacco, which is comprised largely of cigarettes, were about $107.7 billion in 2012, according to market researcher Euromonitor International. Less than 4 percent of retail cigarette sales come from drugstores like CVS and Walgreens.
Walgreens officials said Wednesday that it was continually evaluating tobacco product offerings.
"We have been evaluating this product category for some time to balance the choices our customers expect from us, with their ongoing health needs. We will continue to evaluate the choice of products our customers want, while also helping to educate them and providing smoking cessation products and alternatives that help to reduce the demand for tobacco products," said Phil Caruso with Walgreens Media Relations.
RiteAid also released a statement.
"Rite Aid offers a wide range of products, including tobacco products, which are available for purchase in accordance with federal, state and local laws. Additionally, Rite Aid also sells a variety of smoking cessation products and provides additional resources, including our pharmacists, who are available to counsel people trying to stop smoking. We continually evaluate our product offering to ensure that it meets the needs and interests of our customers," said Ashley Flower with Rite Aid's public relations office.
The share of Americans who smoke has fallen dramatically since 1970, from nearly 40 percent to about 18 percent. But the rate has stalled since about 2004, with about 44 million adults in the U.S. smoking cigarettes. It's unclear why it hasn't budged, but some market watchers have cited tobacco company discount coupons on cigarettes and a lack of funding for programs to discourage smoking or to help smokers quit.
Tobacco companies also have increasingly relied on their packaging and displays at retailers to build brand loyalty and grab consumers because it is one of the few advertising levers left to them after the government curbed their presence in magazines, billboards and TV.
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The AP's Tom Murphy reported from Indianapolis and Michael Felberbaum reported from Richmond, Va.