In big retail news this week, drugstore chain CVS announced it would no longer carry tobacco products at its more than 7,600 locations nationwide. The move, which should be fully implemented by October, is one aimed at calculated branding, rather than the company’s bottom line (apparently $2 Billion of its annual $125 Billion is on the chopping block). In fact, the company has said the move is part of a growing plan to continue its work with doctors, hospitals and other care providers to improve customers overall health.
While investors seem to be eyeing the company with skepticism (its stock opened 55 cents lower Wednesday morning after the announcement), others including President Obama, applauded the move: “As one of the largest retailers and pharmacies in America, CVS Caremark sets a powerful example, and today’s decision will help advance my Administration’s efforts to reduce tobacco-related deaths, cancer, and heart disease, as well as bring down health care costs – ultimately saving lives and protecting untold numbers of families from pain and heartbreak for years to come.”
CVS has been most successful in recent years in its pharmacy benefits management business, or PBMs. By positioning itself as another care provider, right alongside the rollout of the Affordable Care Act, CVS is not only strengthening its brand, but getting extremely invaluable publicity. Individual insurance plans for smokers can cost up to 50% more, and employers can offer 50% monthly discounts to employees who undertake a smoking cessation program (which, surprise! CVS now plans to offer).
So what do you think readers, calculated PR move, bold stand, or both?
- On February 6, 2014