CVS stops selling tobacco products

Steak Snabler · Sep 4, 2014

outofplace said:

LongTimeListener said:

That is a really wacky comparison.

Candy and sugar can be consumed in moderation to little or no negative effect. Many people overdo it, but doctors don't advise people "don't eat sugar EVER."

I'm not aware of any diet or health recommendation that allows a moderate amount of smoking.
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There isn't one. Some people are just desperate to support smoker's rights and they will stand by any argument they can find.
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The brother of a close friend of mine is a doctor. When he graduated from med school, my buddy jokingly asked him, "so, what'd you learn in med school?"

His reply: "Don't smoke. It triples your risk factors for everything."

The Big Ragu · Sep 4, 2014

http://www.newyorker.com/business/currency/cvs-quit-smoking

Pretty good summary of CVS trying to shift to health care.

outofplace · Sep 4, 2014

Bob Cook said:

The Big Ragu said:

Seems like CVS looks X years into the future, and it is seeing a better future as a health care company than as a retailer.

I have no idea if they are betting correctly, but health care costs on a per capita basis are growing significantly and are projected to keep growing that way. Meanwhile, the retail landscape is really crowded. Plus, cigarette smoking is declining, so it likely isn't a growth area. CVS already runs hundreds of walk-in medical clinics. I'd expect them to start building out into that kind of business. It's harder to do that when you are selling cigarettes behind the registers.
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I thought CVS announced the no-smokes policy months ago (or at least threw it out there), and, yeah, the stated reason was that it would buttress its position as a health company. It is also the largest chain of in-store clinics, and has an enormous pharmacy benefits management business.

Of course, you can still buy alcohol and fatty foods. In fact, it wouldn't shock me if CVS' alcohol aisle gets bigger as a result of the freed space. That matches -- beats -- tobacco in profit margin. Plus, people still drink. And you can put hard liquor behind the counter where the smokes used to be. And Walgreens a few years ago resumed alcohol sales after a 15-year hiatus.

http://online.wSportsJournalists.com/news/articles/SB10001424052748704515704575282370477702814
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You and Hank are correct to say this was announced a while ago. They made the switch this week.

old_tony · Sep 4, 2014

Boom_70 said:

The timing is interesting. Maybe they did not want to see their
clerks assaulted over Swisher Sweet's
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Perfectly executed.

Bob Cook · Sep 4, 2014

The Big Ragu said:

Bob Cook said:

The Big Ragu said:

Seems like CVS looks X years into the future, and it is seeing a better future as a health care company than as a retailer.

I have no idea if they are betting correctly, but health care costs on a per capita basis are growing significantly and are projected to keep growing that way. Meanwhile, the retail landscape is really crowded. Plus, cigarette smoking is declining, so it likely isn't a growth area. CVS already runs hundreds of walk-in medical clinics. I'd expect them to start building out into that kind of business. It's harder to do that when you are selling cigarettes behind the registers.
Click to expand...

I thought CVS announced the no-smokes policy months ago (or at least threw it out there), and, yeah, the stated reason was that it would buttress its position as a health company. It is also the largest chain of in-store clinics, and has an enormous pharmacy benefits management business.

Of course, you can still buy alcohol and fatty foods. In fact, it wouldn't shock me if CVS' alcohol aisle gets bigger as a result of the freed space. That matches -- beats -- tobacco in profit margin. Plus, people still drink. And you can put hard liquor behind the counter where the smokes used to be. And Walgreens a few years ago resumed alcohol sales after a 15-year hiatus.

http://online.wSportsJournalists.com/news/articles/SB10001424052748704515704575282370477702814
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This is how they are positioning themselves, including the name change from CVS Caremark to CVS Health. I wouldn't be very surprised if the nature of the business shifts over the next few years -- subtly at first, maybe overtly at some point. I wouldn't expect them to jettison food overnight, because they aren't going to throw away billions of revenue without replacing it. They have to transition and still keep shareholders happy, as it happens. But if they get knee deep into that kind of transition and alcohol and fatty foods are proving to hurt the image they need to project, I suspect they will jettison those categories. They are banking on there being way more growth ahead in devoting space in their stores to health care services than there is in competing in groceries, which is a pretty low margin business. Unless you have volume, it is a treadmill to try to keep growing selling groceries, and that category just stays perpetually crowded. CVS has already been transitioning. It has partnered with a ton of health systems and local hospitals to run its clinics in the last year, and it has been opening those clinics at a fast clip. When it reported earnings, the revenue from those clinics was giving them double digit growth already.
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Their model in the Minute Clinics is to contract out the work to a local health system. That way, there is a trusted hospital name on the door, not just your local drugstore treating your for whatever. Also, those hospitals have been buying up or hiring primary care physicians, so for them, the benefit is not just whatever they make working the Minute Clinic, but steering patients without doctors (or even patients with them) to the system's doctors and/or other facilities. With Obamacare adding so many to the insurance rolls, the clinics can get more patients, and the hospital systems can use the clinics to get more patients. That's the thinking, anyway.

However, I have a hard time believing that CVS will move out everything BUT health. Walgreens (which also has in-store clinics, but isn't expanding as aggressively as CVS) is more explicit about being your neighborhood convenient store, and CVS serves a similar function. Plus, while you're waiting to get in the clinic, you might be enticed to buy a little something.

The Big Ragu · Sep 4, 2014

I didn't mean to suggest I believe they are getting out of all retail business except health care. They did, however, ditch selling cigarettes, because it isn't consistent with their new focus. I think they will ditch anything else that is at odds, too, if it becomes necessary.

What you wrote is how I understand their partnerships with a lot of local hospitals. There is a shortage of primary care physicians, that many people believe is going to get worse. They are trying to position to fill the void with reimbursable visits to see their physicians assistants and nurse practitioners. They aren't the only ones doing this. But right now they are being explicit about their plans.

exmediahack · Sep 4, 2014

outofplace said:

LongTimeListener said:

That is a really wacky comparison.

Candy and sugar can be consumed in moderation to little or no negative effect. Many people overdo it, but doctors don't advise people "don't eat sugar EVER."

I'm not aware of any diet or health recommendation that allows a moderate amount of smoking.
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There isn't one. Some people are just desperate to support smoker's rights and they will stand by any argument they can find.
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I'm certainly not one to be out supporting a smoker's rights as I'm very pro-smoke free for just about anyplace that is indoors. I still can't believe, as a child, that I often dealt with second hand smoke at MLB games from whatever adult was sitting next to me.

I just find it funny CVS will take this stance but still fill their shelves with food and snacks that, as we see in American society, lead to obesity as fewer and fewer people take care of themselves.

Boom_70 · Sep 4, 2014

Next up McDonalds stops selling french fries

TheSportsPredictor · Jun 28, 2017

Hiding the candy now:

Why Your Local CVS Is Hiding the Candy and Tanning Oil

cjericho · Jun 28, 2017

TheSportsPredictor said: ↑

Hiding the candy now:

Why Your Local CVS Is Hiding the Candy and Tanning Oil
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Will the condoms be easier to find then?

TheSportsPredictor · Dec 3, 2017

old_tony said: ↑

Is CVS a publicly traded company? If I were a stockholder I would not be happy.

As MTM noted, this will not draw in one single customer, but it will force others to do business somewhere else.

Then, take into account those who were going to get a prescription filled, pick up a gallon of milk and a pack of smokes. They'll also get that gallon of milk and prescription at Walgreen's or whatever other nearby drug store is there. This is not going to cost them just tobacco sales. It's going to cost them in all other areas when smokers do all their other commerce where they can buy their smokes.
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Seems to have worked out:

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CVS stops selling tobacco products

Steak Snabler Well-Known Member

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CVS stops selling tobacco products

Steak Snabler Well-Known Member

The Big Ragu Moderator Staff Member

outofplace Well-Known Member

old_tony Well-Known Member

Bob Cook Active Member

The Big Ragu Moderator Staff Member

exmediahack Well-Known Member

Boom_70 Well-Known Member

TheSportsPredictor Well-Known Member

cjericho Well-Known Member

TheSportsPredictor Well-Known Member

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