The nation's second-largest drugstore chain announced Wednesday that it would stop selling cigarettes and other tobacco products in its 7,600 stores starting Oct. 1. CVS/Caremark's (CVS) move could cost the company $2 billion in annual revenue.
"Ending the sale of cigarettes and tobacco products at CVS/pharmacy is simply the right thing to do for the good of our customers and our company," said CVS CEO Larry Merlo. "The sale of tobacco products is inconsistent with our purpose – helping people on their path to better health."
Health and Human Services Secretary Kathleen Sebelius applauded CVS's decision in a statement:
"CVS Caremark’s announcement that CVS/pharmacy stores will no longer sell cigarettes and other tobacco products is an unprecedented step in the retail industry. We also commend CVS Caremark on their new national smoking cessation program. With more than 7,600 CVS/pharmacy locations, this private sector health leader’s new policy will have considerable impact. Today’s CVS Caremark announcement helps bring our country closer to achieving a tobacco-free generation. I hope others will follow their lead in this important new step to curtail tobacco use."
More than 20 million Americans have died from smoking-related illness over the last 50 years. Cigarette smoking kills half a million Americans each year and an additional 16 million suffer from smoking-related conditions. A new report from the Surgeon General says nearly 5.6 million American children – or one out of every 13 children under age 18 – will die prematurely from smoking-related diseases unless current smoking rates drop. The Surgeon General's office estimates that smoking costs taxpayers more than $289 billion a year in direct medical care and other economic costs.
Other major retailers like Target (TGT) and Wegmans have banned sales of tobacco for years with little pushback from customers. Yahoo Finance's Mike Santoli says CVS competitors like Walgreen Co. (WAG), 7-Eleven and dollar stores will get more business from smokers. But this was a smart move by CVS for many reasons, he adds.
"Tobacco is a declining market," says Santoli. "It's not a huge profit center."
Follow The Daily Ticker on Facebook and Twitter (@DailyTicker)!
More from The Daily Ticker