Professor Elam

Thursday Sept 4 2014

CVS will cease selling cigarettes. Why would a company forgo $2 Billion in annual sales?  As this article says, there is more money in health care than in retail. CVS is transitioning to become a health care company rather than a pharmacy convenience store. 

Thsi as Professor Love would say, is a change in strategy, the big picutre of where you want to go. The tactic is to drop cigarettes, how can one claim to be promoting health and sell tobacco at the same time?  So far Walgreens has simply remarked that customers can buy the same at the Dollar Stores, so it is still in the tobacco business. Years ago I recall the President of WAG saying 35% of its customers bought tobacco. I doubt the number is anywhere near that today. 

It will be interesting to see how this plays out between the two compnaies.