This big PR push by CVS to highlight that they are stopping the selling of tobacco products.. brings to mind when Wal Mart drug out their launch of their $4 /Rx program. Big press release when they started in one district or one state.. and then they rolled it out 1-2 states at a time..each with a huge press release of how “great we are”..
Do these chains really care about having a relation with pt/customers… or just have a relationship with the pt/customer’s wallet ?
How long does it take to eliminate the inventory in this category? Just like Walmart.. how long did it take to change the pricing structure thru out the chain. .. that is controlled from a central location..
If CVS was really concerned about the health of their customers and/or the general pubic.. they would put a sign on the front door of the stores.. notifying customers that they have stopped selling tobacco and all remaining inventory will be sold at a discount.. BUT.. how many more major press releases do you think that we are going to see over the next SIX MONTHS about them stop selling tobacco products..
Granted that tobacco is a very lethal product… killing some 440 K annually… BUT… what about the 140 K that are killed by alcohol.. that CVS still sells !
But tobacco represents a low profit margin product… that is high on the pilferage list and can’t allowed to be self-service due to that.. so it has a higher man hour costs than other front end products. Once they eliminate “the shrink” on this product and the man hours necessary to sell the product.. they may not be losing that much net profits.. maybe, even showing a increased profits….but I am sure that they will tout how much sales they are giving up.. not .. how much it will affect their bottom line.
Filed under: General Problems
an addendum
http://www.chaindrugreview.com/front-page/newsbreaks/cvs-finishes-2013-with-strong-fourth-quarter
You hit the nail on the head again,Steve. CVS got more free publicity out of this than they could have hoped for. Cigs account for only 2% of sales (not profit). They are not a “destination” item. SInce they are kept locked in the front area of the store, the customer does not have to walk down many aisles or to the back of the store while picking up other items on the way. They are a low profit, high theft item and will put hardly a dimple in CVS profits. Will they stop selling liquor and potato chips next?