The nation’s second-largest pharmacy chain today said it would stop selling tobacco products at its 7,600 drugstores nationwide by October. CVS/Caremark says the products no longer align with the company’s move to become more of a healthcare company.
The news is a blow to big tobacco, which is already facing declining sales in an environment where smoking bans are increasing in cities and towns across the country. However, the tobacco industry is still worth about $100 billion a year.
It will be an expensive move for CVS as well. The company estimates that it will lose about $2 billion in annual revenue from tobacco and related products. But CVS’s decision to be the first major chain to kick the tobacco habit puts instant pressure on rival chains, like Wal-Mart and Rite Aid to follow suit.
President Obama issued a statement cheering CVS/Caremark’s decision. The President said CVS is setting a “powerful example” that “will have a profoundly positive impact on the health of our country."
Tobacco is responsible for about 480,000 deaths a year in the U.S., according to the Food and Drug Administration, which gained the authority to regulate tobacco products in 2009. An estimated 44 million people, roughly 20% of all adults in the United States smoke cigarettes, according to the Centers for Disease Control.
- Consumer Discretionary