CVS Says No More Tobacco, But What About E-Cigarettes?
On Wednesday, CVS announced that they would no longer sell cigarettes and other tobacco products at any of the 7,600 locations around the United States. Tobacco products are worth up to $2 billion in sales to the mega-chain, but they are still moving forward with plans to pull cigarettes from the shelves. However, the future remains unclear on whether CVS will embrace electronic cigarettes as an alternative.
The media has repeatedly praised CVS for the courageous move to stop selling cigarettes. Even President Obama said it was “powerful example” for retailers. Rita McGrath, a business professor from Columbia, told Fox Business that CVS was making a smart move. “There is a bigger strategy behind this… CVS is pulling out of an area that’s really slow growth. This is never going to be a growth area for that firm again, and it’s freeing up those resources they can start investing in areas of other opportunity,” she said.
McGrath also mentioned that other retailers would face new pressure to follow the same steps and stop selling cigarettes or risk looking inferior. “It’s going to be risky for those other firms if they don’t respond in some way.” So far, rival stores like Walgreens and Rite Aid are still stocking cigarettes, but it could be a matter of time before those stores also pull tobacco from the shelves.
So far, CVS has elected not to sell electronic cigarettes, but as they pull tobacco products, some have speculated about whether they would embrace e-cigs as an alternative. After all, these products are tobacco-free and they would be a perfect replacement product to boost profits and help smokers take steps to stop using tobacco.
According to Time, CVS won’t make a final decision on e-cigs until the FDA weighs in. So far, several ecig companies have spoken out praising CVS for saying good-bye to tobacco products and encouraging the chain to consider adding electronic cigarettes in the future. NJOY issued a public statement last week, recognizing the retailer for making a positive step towards public health. “NJOY applauds CVS Caremark for its courageous decision to go tobacco free… nearly half a million Americans die every year due to smoking and we believe electronic cigarettes can help end this epidemic.”
Andries Verleur, CEO of VMR E-Cigs, also praised CVS for the decision. “We believe in the mission to create a tobacco-free generation. With this in mind, we are also pleased that CVS will continue to emphasize the importance of alternatives to tobacco and hope that they will ultimately recognize the impact of electronic cigarettes, which do not contain tobacco, in this category.”
CVS spokesman Michael DeAngelis said the company would hold off on making any decisions about e-cigs for now. “We wouldn’t speculate on how the FDA will decide about this product. We will evaluate once their decision is made.”
How do you think CVS customers will react to the decision to stop selling cigarettes? Is this a positive business move?