CVS Caremark Corp. announced today that they would stop selling all tobacco products from their retail stores this year. The decision was made to try and bolster their image as a healthcare provider. It is expected to cost them $2 billion in annual sales.
Business decisions like this are always perplexing to me. Does Larry Merlo, President and CEO, think he’s actually improving anyone’s health with this announcement? If you’ve ever been to a CVS, usually the first 2 aisles are stocked full with candy, chips, jerky, and soda. The next 2 might be dedicated to cosmetics. Some stores, I’m told, sell liquor.
I understand the desire to paint a marketing brand image. But CVS is a for-profit business. If I was a shareholder, I’d be dumping the stock. Or calling for Merlo’s head.
The fact is that no one that uses tobacco is forced to do so. They CHOOSE to do so. Yes, that includes teens subjected to peer pressure and media glamorization.
If you’re a smoker and CVS stopped selling cigarettes, what would you do? If CVS is the ONLY place in your town to get cigarettes, you might actually be forced to quit. But almost certainly, you’re just going to go right next door to the Walmart or 7-11 or Kroger or the gas station. So Merlo is basically pushing $2 billion into the pockets of his competitors.
Now, CVS can do anything they want. If Merlo wants to take $2 billion in sales off the table to push a marketing image, that’s his choice. But recognize the futility of trying to force adults to make good decisions. Instead of telling consumers what they are allowed to buy, retail business should be listening to what consumers are demanding if, in fact, they want to stay in business.