CVS Going Tobacco-Free

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Will Truman

Will Truman is the Editor-in-Chief of Ordinary Times. He is also on Twitter.

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45 Responses

  1. Avatar Mo says:

    Aren’t gas stations the go to place to buy them.Report

  2. Avatar zic says:

    About three years ago, I was in Brooklyn NY and looking for a pack of smokes to help dull my sensitivity to the city. (I am a smoker who mostly doesn’t smoke; I am addicted, so can never say I’m not a smoker. I occasionally do when stressed, and NYC was stress.)

    I was amazed at how hard it was to find a place that sold them there; at least in the neighborhood I trudged.Report

  3. Avatar Damon says:

    I heard about this on NPR last night on the way home. I think they spent 10 mins out of 30 on this story, or maybe it just SEEMED like it. While listening to the Pres of CVS talk about this I kept thinking “wait, you’re currently selling the stuff that makes people sick and treats their resulting illnesses”, if that isn’t capturing the entire market, I don’t know what is. But I have to assume that CVS’s push to be a bigger player in “health care” would kinda get pushback from the anti tobacco buttinskies if they still sold the smokes. I would love to see the present value projections of the revenue gained/loss over this policy swing…Report

  4. Avatar greginak says:

    It is actually sort of amazing it has become national “news” that a large store has stopped carrying a certain product. What next; CNN digs into TGIF’s taking cheese sticks off their menu, Kroger markets changing their variety of pasta products. It is more a testament to the power that smoking used to have ( read as tobacco companies) and the symbolic nature of smoking that this is even an issue. Who the spork cares if CVS stops carrying smokes, well other then their PR department who i’m sure it tickled pink that this is “news.”Report

    • Avatar Kazzy says:

      I saw a Breitbart piece that attempted to turn it into another “culture wars” battle. Even their commenters didn’t really take the bait as most realized this wasn’t some sort of Obamacare Terror Plot but was just a business decision. Still, I’m guessing news orgs might be/have been aligning themselves in the event the decision was more controversial with the public.Report

    • FWIW, a few weeks ago CNN was trying to incite a panic with several big headlines over the course of a couple of days about how “hundreds” (or was it thousands) of classic movies were about to disappear from Netflix forever. That this happens on a regular basis because of licensing agreements didn’t seem to faze CNN – it was still a story worth pushing heavily.

      All of which is to say that your scenarios are pretty much exactly what’s next.Report

    • Avatar zic says:

      Perhaps the real news here is the profit margins.

      Butts are really expensive now. When I started smoking, they were 50¢ a pack, and anyone could purchase them. When I purchased that pack I sought out in NYC, it was nearly $10, and as I understand it, much of that was tax.

      So perhaps the taxes, etc., have increased enough to cut into the profit margin vs. the amount people are willing to spend, combined with a general shrinking of the market, making them not worth the shelf space they take?Report

  5. I think you’ve hit the nail on the head in pointing out that this is about the low margin of cigarettes. Of the $2 billion, only about $1.5 billion of that is lost cigarette sales, and the other half billion is from lost sales over other items to people who buy cigarettes (which as you hint is probably a gross overestimation). But as big a figure as $1.5 billion sounds, it actually only represents about 1% of CVS’ gross sales. Because of the low profit margins, it obviously represents significantly less than 1% of CVS’ net profits. More than that, though, it’s a product for which demand is rapidly declining. Also, for such a decreasingly profitable item, it’s a major hassle to keep the cigarettes in the store – there’s potential liability for selling to underage kids, you’ve got to keep tabs on all the special tobacco taxes, can’t use them in promotions, have to store them behind the counter and have an employee grab them for the customer, etc.

    Meanwhile, CVS’ business overall has been growing pretty rapidly according to that CNN article – 15% between 2011 and 2012. It quickly becomes a function of simple math to realize that CVS can make slightly more money if it rededicates the inventory/shelf space and costs dedicated to selling cigarettes to something that is more profitable.Report

    • Avatar zic says:

      I’d proffer this as an example of how a well-regulated free market can achieve something of benefit.

      I’m bothered by the displacement markets the tobacco industry seeks out.Report

    • Avatar Alan Scott says:

      Yeah, pretty much. And not only are fewer people smoking, but they’re smoking more brands and varieties than ever before. So to cater to smoker’s needs, CVS has to stock more tobacco products that it did before even though it has fewer tobacco-buying customers. Which means those cigarettes have pretty low turnaround.Report

    • Avatar Vikram Bath says:

      Apple sold less than $1 billion in iPods last quarter. It would certainly be news if they stopped selling them.

      In the case of CVS, they are discontinuing a product they have already gone through the licensing, distribution, and inventory headaches to sell. It’s never trivial to shut down a business that does more than a billion in sales profitably, even if it is a relatively small fraction of your total business.

      I think you can say it is an overblown story (though I haven’t really seen evidence of that), but it is a story. There are certainly news items of more triviality that have gotten more exposure.Report

      • Avatar morat20 says:

        Um, stores do that all the time. They change what they put on their shelves practically daily.

        As noted: Selling tobacco is a PITA because there’s a lot of laws around it, mostly to keep it away from kids. Fewer people smoke it, so why go through the PITA? Especially now that CVS has, amusingly, started to offer alcohol.

        Which is just as much as a PITA but it’s not a quickly declining market.Report

  6. Avatar North says:

    Well I have a CVS next door to me so I consider this lovely news. Not that I was planning on going anywhere else for pharmacy business.. I think neighbors can safely be considered a captive customer base unless you have an employee stationed at the door to flail the customers when they come in with a mop or something.Report

  7. Avatar Jaybird says:

    Will they start selling vapes instead? Put various juices on the shelf behind the cashier?Report

    • Avatar Kazzy says:

      Porn. All porn.

      That’s what I’m hoping at least. Porn contributes to far better societal outcomes than do cigarettes.Report

    • I kind of wonder if they’re looking to expand their photo centers. Having the ability to do everything same-day is a definite advantage they have over the Snapfishes of the world, but two of the three times I’ve tried to do something significant at CVS they’ve been out of the inventory of whatever item it was I was trying to customize (usually the photo books). The profit margin on those photo gifts has to be pretty good, but if you’re out of stock on them, then you’ve lost your competitive advantage.Report

      • Avatar zic says:

        On-demand publishing?

        Interesting.

        I’ve been thinking of that as a model for my knitting patterns; a way to let people buy a bunch of designs or e-books (I sell pdfs,) that lend themselves to a self-printed book they could arrange to their needs. The access to reasonable printing was the big reason not to bother, but what you’re suggesting would make it totally worthwhile.Report

      • Avatar zic says:

        And a follow-up thought: isn’t the e-book sector, self-published books for download a growing sector? I would imagine a demand for e-books that people don’t want to read on an e-reader; or for books people so love they want a physical copy. I can also see potential of printing e-books with your own annotations in them as a work of art in its own right.

        Seems to lack traditional-media functions of review, etc.Report

      • Huh- I’m sure CVS doesn’t offer publishing outside of photo gifts currently, but the technology has to be pretty much the same. That would be pretty cool.Report

      • Avatar zic says:

        The only part of the technology that would differ is the software.

        And that’s the beauty of software, easy to adapt for multiple applications.

        And also the nightmare, because all that hardware frequently generate changes that need to be maintained in the software.Report

      • Avatar Will Truman says:

        I suspect the reason that they wouldn’t is profit margins. I suspect that those photo books have reasonably high profit margins because they can charge a premium due to the nature of the commodity. Books, on the other hand, are a competitive market. There may well be a market for “I want to go to the store and get this now” but I’m not sure how much of a premium they can charge before they say “I am going to go on Amazon and order this.” (Amazon has some great options for authors who want to port their ebooks to physical ones, from what I understand.)Report

      • Avatar zic says:

        @will-truman the point is that customers could put together and print a book from a variety of sources using the same equipment and stock currently used for the photo books. It’s using what they already have to produce more sales.Report

      • Avatar Will Truman says:

        I could see the part about being able to arrange the PDF’s working out, if you need them in a particular order, want sections eliminated, or want to pull from more than a single source. I’m not sure the demand on that, though. Or what the copyright implications would be, or the costs of maintaining a copyright database (where your book is okay to print, but Joe Smith’s isn’t). The same goes for the annotated versions.

        There might be a market for it, but it sounds complicated from an IP standpoint.Report

    • Avatar zic says:

      JB, one of the interesting new growth-market sectors here in Maine is the grow store, often being integrated with the traditional garden/greenhouse sort of thing.

      All that grow equipment, from lights to organic fertilizers to hydro systems, now available for the common gardener. I’ve one friend who opened a grow shop after the medical laws were passed, and he says he’s been really surprised at how gardeners with no interest in growing pot have taken to it.

      I’d be interested to hear if you notice this in CO; growth of weed gear into non-weed markets.Report

      • Avatar Jaybird says:

        Ever since “Medicinal” was legalized, there have been commercials on the radio dealing with gardening. At first, the ads were of the form “would you like to eat delicious heirloom tomatoes year round?”

        Now the DJ just asks “ready to start growing a few plants? Come to Grow Warehouse!”

        As for grow stores themselves, I haven’t seen that many spring up. That might be because of how very lenient our “Get A Prescription!” requirements are (you can get a ‘scrip for problems such as anxiety, back pain, and, yes, diarrhea) and when you add that to the fact that our Medicinal stores have reached the point where they’re competing on price ($25 for a top shelf eighth was on a sign I drove past the other day), I suspect that growing one’s own is a lot like brewing one’s own beer.

        Serious hobbyists might do it but people who merely need a bag can get their needs met Romeo Foxtrot November for seriously cheap. Why bother?Report

      • Avatar Glyph says:

        Where I live, we don’t even have medicinal, and it’s pretty hilarious the way the gardening places still market grow equipment anyway to clandestine operators with a “wink-wink-nudge-nudge”.

        There’s an ad for one shop with a logo that’s an anthropomorphic flower, and his eyes are visibly reddened and kind of half-mast.

        He is one seriously stoned sunflower.Report

      • Avatar zic says:

        @glyph it was like that here after the first (lame) law passed; with the updated version, it’s come out in the open.

        this seems to be running a parallel path to home brewing.Report

    • Avatar Troublesome Frog says:

      When I started seeing e-cigarettes advertised my first thought was, “What did the product pitch look like?” Was it, “Hey, remember smoking? We’re bringing it back!”Report

  8. Avatar Mike Schilling says:

    Who still uses CVS?Report

    • Avatar Damon says:

      CVS is now big in perscriptions. Our company recently made them our preferred provider for that. They provide mail order script servicing and you get discounts by using their stores for prescriptions.Report

  9. Avatar Michael Drew says:

    I heard the stores will stop selling them “by October.” This is not a complaint but just a logistics question as I really don’t care if they sell them, but what could possibly take eight months to get them off the shelves – or even go through the stock they have on hand?Report

  10. Avatar Michael Drew says:

    Also, are we headed toward a time when you can go to pharmacies for marijuana cigarettes but not tobacco ones? Seems like it.Report