Dive Brief:
- CVS Caremark announced that its front store sales have declined 0.4% in the second quarter, a loss driven mostly by its decision to stop selling tobacco products.
- The company instituted the policy in February, saying that the sale of tobacco products was "inconsistent" with its mission to be a provider of health and wellness services. Multiple physician groups praised the move, urging other drugstores to follow suit.
- But with this loss, CVS reported a strong quarter for its pharmacy business, with same store sales up 5%.
Dive Insight:
While CVS's decision to walk away from $2 billion in tobacco sales was shocking in February, these recent numbers, even with the front of store loss, are encouraging. If the drugstore can continue to post strong pharmacy retail sales and raise its earning guidance, perhaps it will serve as a model for other drugstores to eliminate their own tobacco sales.