Holy Smokes!Posted: February 10, 2014 Filed under: Employee & Labor Relations, Total Rewards Leave a comment
I am sure you have heard. CVS/Caremark is the first national drug store chain to announce it will no longer sell tobacco products by October of this year. Good? Bad?Indifferent? This decision will cost CVS/Caremark (and its shareholders) $2 billion USD a year in revenue annually. That is a lot of tobacco sales.
Was this a prudent business decision? If you listen to Chief Medical Officer Troyan A Brennan, M.D., it was. This bold stance on tobacco sales has set the bar high for drug stores across the nation. The company is moving to the direction of becoming part pharmacy, part grocery store and part primary care provider. The intent is that stopping the sales of tobacco products will position CVS/Caremark, the second largest player in the chain drug store industry (Walgreen’s is #1), as a new type of company committed to the overall health of its patrons. The future will tell if the formula works. CVS has to work on its image in order to achieve these goals. The tobacco sales decision is a step in that direction, for sure.
So, what does this mean for the workplace? Many companies have some sort of tobacco use policy and banned or limited smoking and use of tobacco products on their campuses. CVS’s decision is certainly in alignment with this trend. Will insurance plans start credentialing CVS stores as primary or urgent care facilities? If CVS sees their vision to fruition, it will offer a fast and convenient alternative to physician offices and urgent cares. The hospital where I work has a CVS within walking distance. From time to time, I see employees go to that CVS for cigarettes and even see them smoking in the parking lot of CVS. Will CVS join the ranks of companies prohibiting the use of tobacco on its premises?
I wonder how CVS’s transformation to health care provider will shape the market share for the retailer. I am not sure I see CVS as a place to get my blood work done or have a physical. They do give flu shots, though. And I can always get a bag of chips when I pick up my Advil.
Don’t forget to CELEBRATE!