Thursday, February 06, 2014
A major drug store chain has announced that it will stop selling cigarettes. CVS is taking a $2 billion annual revenue hit to get out of the business of "cancer sticks." It is a great example of PR -- doing the right thing even though it costs. Give credit to the company that it finally recognized the contradiction of prescribing medicines to combat the ravages of smoking at one end of the store and selling cigarettes at the other. One could say that it was about time, but sacrificing that much revenue is no easy decision to make. It took courage on the part of the CEO. On the one hand, shareholders want earnings and probably did not care whether the company sold "smokes" or not as long as the return was there. On the other hand, CVS could not really claim that it had the best interests of its customers at heart by continuing to sell tobacco. CVS won't replace the $2 billion right away nor the earnings per share, but it is willing to take on that task. Good for the company.