Ever since CVS Well being ditched tobacco merchandise in 2014—sacrificing $2 billion in gross sales to bolster its picture as a well being firm—Ceremony Support and Walgreens have been going through strain to comply with go well with.
The businesses just lately raised their minimal tobacco gross sales age from 18 to 21—aiming to scale back minors’ entry to them. However the strikes got here quickly after a lashing in March from the FDA, which discovered each chains, with a mixed fleet of 15,000 shops, to be amongst 15 main retailers promoting cigarettes to minors.
Past the brickbats and unhealthy PR, declining gross sales could be a legitimate cause to exit the class: Cigarette gross sales fell to 252.7 billion sticks in 2017, from 292.7 billion in 2012, based on Euromonitor Worldwide.
Cigarettes are a modest and declining enterprise for U.S. drugstore chains—whole gross sales of about $1.6 billion primarily based on Euromonitor Worldwide information—however they’re a desperately wanted supply of foot visitors for Walgreens and Ceremony Support. Each chains have seen comparable non-pharmacy gross sales fall up to now 4 quarters.
However in distinction, gross sales at CVS had been up 0.5%, displaying that there is usually a wholesome retail life after dropping a nasty behavior chilly turkey.
For a nuanced take a look at the well being of CVS: click on right here.
This text initially appeared within the June 2019 difficulty of Fortune.