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Thread: CVS becomes first big US drugstore chain to drop tobacco

  1. #121
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by washunut View Post
    The article I read on this today says that the other purchases are built into the $2 billion estimated sales loss. Tobacco products are about $1.5 billion and another $500 million of other stuff, just as you mentioned.

    As a stockholder, I would have preferred if they let someone else be the trailblazer and if it enhances business then great. Time will tell ( in future earnings statments) if this was a good idea.
    That is going to be the interesting thing to watch for. Investors can be fickle creatures so the question is when they watch revenues fall, do they stay on and ride it out or does CVS start to take a hit on the stock side as well? If they start bleeding from revenue and stock losses do they maintain enough leverage to recover?
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  2. #122
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by Superfly View Post
    Who would buy cigarettes at CVS, anyway? When I saw the clip on the news, it showed "B reel" of an employee stocking the cigarettes, and they were like $8.50 a pack. A pack. Just one.

    CVS has the right to do what they want to do, but a 2 billion dollar a year loss of income is pretty substantial.
    When I was a heavy smoker I did under certain circumstances. If I was already going there to pick up other things and knew I was running low on smokes they were already there so I bought. Or if I was on the road and all there was in route was a CVS I would stop in to buy a pack.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  3. #123
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by Henrin View Post
    But the bottom line is the entire reason they are in business. It's nonsensical to put emotion into your business decisions, and frankly, it's just bad business. The only thing that would make sense to stop selling a product is if it wasn't turning you a profit or you wanted to replace it with another product that can yield you higher returns. Otherwise, it's just dumb and counterproductive.
    Depends. Every business has a loss leader, in restaurants it may be the most popular menu item but one that compliments high profit items, like a crab pizza that pairs well with white wine or cocktails. In a grocery store it may be the meat discounted for the day that get's people into the store who may purchase everything else at markup, and if they brought their kids, the impulse selection at the checkout pads things a bit. Convenience stores make the least on gasoline, they want you to go in and buy chips, a soft drink, etc. all that have a higher markup than the grocery store.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  4. #124
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by LaMidRighter View Post
    Yep. New York state is a perfect example, their cost per pack price is something like 10$ a pack and the result was an entire underground business in unlicensed sales, people would go to the neighboring states or local reservations and pick up dirt cheap tobacco products by the truck load and sell them at a margin that was lower than the licensed sellers but high enough for a healthy profit.
    This is very true - they did a study here in Toronto of cigarette butts around highschools and found that something like 70-80% of the butts were from contraband cigarettes, not legally sold ones. It's why I believe the actual incidence of youth smoking is higher than studies would indicate.
    "Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views." William F. Buckley Jr.

  5. #125
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by jonny5 View Post
    I think its significant proof that we dont need govt to control us. If people dont like cigs, businesses wont sell them. If people dont want smoke in their restauraunts, restauraunts will ban them themselves. We dont need a nanny state to tell us what to do.
    The big problem is that the people who want the bans lost in the court of monetary opinion so they just lobbied to force their will on everyone else. It is that obvious, if the money was there to force business owners to ban use of tobacco in their establishments then it would have disappeared without all the legislation, most of the bar owners and restaurant owners I knew didn't smoke and in fact hated the smoking habit, yet, their bars and restaurants had....................smoking.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  6. #126
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Someone mentioned Walmart may stop selling. What I don't understand is why are their cigarettes so expensive in the store but their gas stations are the normal prices?
    "We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy." -Reagan

  7. #127
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by CanadaJohn View Post
    This is very true - they did a study here in Toronto of cigarette butts around highschools and found that something like 70-80% of the butts were from contraband cigarettes, not legally sold ones. It's why I believe the actual incidence of youth smoking is higher than studies would indicate.
    The thing about studies is they require honest answers, I don't know many teens who would honestly say they smoke for a couple of reasons, the first being the public shame campaign on right now but the second and most important is their parents would kill them.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  8. #128
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by JohnWOlin View Post
    Someone mentioned Walmart may stop selling. What I don't understand is why are their cigarettes so expensive in the store but their gas stations are the normal prices?
    Gasoline is a low margin item, but while you're filling up they hope you will notice the higher margin items and make additional purchases.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by CanadaJohn View Post
    Big tobacco, at least here in Canada, has been diversifying for some time now - they won't be gone anytime soon, for two very good reasons. 1. The tax revenue from tobacco sales keeps many jurisdictions in revenue, and 2. Who better to take over large scale production and distribution of medical and recreational marijuana.
    People really don't understand that there is no killing the tobacco companies. Like Nabisco? Phillip Morris/RJReynolds thanks you for the business. Some of the Nabisco companies have been diversified like Kraft BUT, the "altria group" owns the bulk of the companies.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  10. #130
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    Re: CVS becomes first big US drugstore chain to drop tobacco

    Quote Originally Posted by Gipper View Post
    Let's go to Chick-Fil-A as mentioned above. They're not open on Sundays. I tend to think that their desire to "balance work and family life" (the idea behind this) counteracts with the profit motive. I'm pretty sure that they wouldn't suffer a loss by opening on Sunday.
    If anything they would make a killing on Sundays, after church a lot of families like to treat themselves to a restaurant.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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