CVS Caremark hits a homerun with a courageous move to align their brand and their core values. 7,600 stores nationwide will no longer sell cigarettes and related items (as of October 1, 2014).
Will there be a loss in revenue due to taking cigarettes off the shelves?
Yes. Estimated at $2 billion a year.
Will there be more brand loyalty and trust for CVS?
Probably. Accountability and corporate social responsibility are becoming competitive advantages in today’s market. Doing what’s right for the health of our citizens will most likely overcome any losses in short-term sales. “People before Profits” leads to more stakeholder engagement and loyalty. It’s also leading to more public attention and rampant publicity as highlighted by Forbes.com article.
Yes. A calculated risk that could have huge pay-offs as seen by other socially responsible businesses (i.e., Patagonia, Tom’s, Chipotle). This bold move could be especially beneficial since they are leading the way.
Is this the right thing to do?
- Cigarette smoking causes about one of every five deaths in the United States each year.
- Life expectancy for smokers is at least 10 years shorter than for nonsmokers.
- Exposure to secondhand smoke causes nearly 42,000 deaths each year among adults in the United States.
Is this a long-term strategic decision?
It appears to be part of a bigger plan for their healthcare initiatives. CVS has already established in-store mini-clinic with nurse and physician staff to assist customers. They are initiating a smoking cessation program. These strategic decisions and shift in services could recoup any losses in cigarette sales.
Care to share your thoughts?
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