CVS Caremark plans to stop tobacco products sales
CVS, the nation’s second-largest drugstore chain, is kicking the habit of selling tobacco products as it continues to shift its focus toward being more of a health care provider.
The company said Wednesday it will phase out cigarettes, cigars and chewing tobacco by Oct. 1 in its 7,600 stores nationwide in a move that will help grow a business that works with doctors, hospitals and others to improve customers’ health.
CVS Caremark Corp. said it will lose about $2 billion in annual revenue by phasing out tobacco, but the move will not affect its 2014 earnings forecast. CVS notches about $1.5 billion annually in tobacco sales, but it expects a bigger hit because smokers often buy other products when they visit their stores. The company brought in more than $123 billion in total revenue in 2012.
The company’s tobacco plan drew praise from President Barack Obama, who said the decision will help his administration’s efforts to reduce tobacco-related deaths, cancer, and heart disease as well as lower health care costs.
Tobacco is responsible for about 480,000 deaths a year in the U.S., according to the Food and Drug Administration, which gained the authority to regulate tobacco products in 2009.