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CVS makes big move, ditches tobacco products February 21, 2014

Posted by rmshepard in Uncategorized.
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CVS shocked the business world in February 2014 after announcing that it was getting rid of tobacco products in its stores. The company’s CEO called the decision “the right thing for us to do for our customers to help people o their path to better health.” Tobacco products make up about $2 billion of the company’s revenue, so it seems like a risky decision. However, with CVS entering the medical services trade, selling such products became inconsistent with its new image. As NPR’s Yuki Noguchi told Morning Edition, CVS is moving in the direction of the new pharmacy:

“Drug stores aren’t just filling prescriptions these days. A lot of drug stores are marketing themselves as wellness centers, and many, including CVS, are running health care centers and partnering with hospitals. So the company has come to the conclusion that selling cigarettes conflicts with these changes.”

Indeed, CVS Caremark CEO Larry Merlo admitted,”This decision is about much more than that. It’s about where we’re headed as an organization, where we expect to be in the future as a health care company.”

While CVS is winning praise from even President Obama for its latest announcement, critics are claiming that it should only be the first step in cleaning up its stores. According to Derrick Jackson of The Boston Globe:

“If CVS truly cares about all the sources of diabetes and other preventable diseases, soda should be the next target. Two days before Brennan’s op-ed, the Centers for Disease Control and Prevention released the most dramatic findings yet linking high sugar consumption to heart disease. The WHO and the American Heart Association recommend that less than 10 percent of a person’s daily calories should come from the added sugars found in processed foods, snacks, and beverages. But 71 percent of Americans exceed that figure.”

For more on the big move by CVS, see the following video:

Discussion Questions:

1.  How was CVS’s decision to get rid of tobacco products a clear PR move?

2.  Can CVS be consistent with its new “healthy” image and still continue to offer the basics to its customers?

3.  What else would CVS have to eliminate from its stores to be completely consistent with its new message?