CVS

Has CVS gone too far with its health kick?

DISCUSSION

Photo: CVS Health

Jun 29, 2017

George AndersonThree years after removing tobacco and the sales that go with it from its stores, CVS continues to make changes at its pharmacies intended to reinforce its strategic focus on health. The latest steps, according to a Wall Street Journal report, involve repositioning the candy aisle within its stores, delisting sunscreen products with SPF numbers below 15, and delisting foods that contain artificial trans-fats.

Earlier this year, the drugstore chain announced plans to remodel stores with an expanded selection of healthy food options, more informational signage, and “discovery zones” within its stores to help shoppers explore new products and health solutions.

In April, Judy Sansone, chief merchant at CVS, said the remodels were being driven by the chain’s research, which found consumers are “taking a more proactive approach to staying well.”

To date, CVS has remodeled four stores, according to the Journal’s reporting. It plans to have “several hundred” out of 9,700 complete by 2018.

Same-store sales at CVS pharmacies fell 4.7 percent in the first quarter as the drugstore chain sold more generics and filled fewer prescriptions overall. Front-end sales at stores open for more than a year declined 4.9 percent during the same period.

When CVS made the decision to get out of the tobacco retailing business in 2014, management predicted that the company would to take a $2 billion hit. At the time, CEO Larry Merlo said the chain had made the decision because “the sale of tobacco products is inconsistent with our purpose.”

Research released in 2015 by CVS found its anti-tobacco efforts had some positive effects as cigarette smoking decreased slightly in states where it operated. The company also reported an increase in the sale of nicotine patches while the number of visits to its in-store clinics for smoking cessation nearly doubled.

Rival Walgreens has continued selling tobacco products despite pressure from health advocates to follow the lead of CVS. Walgreens announced this morning that it was no longer pursuing its acquisition of Rite Aid. Instead, it has offered $5.2 billion to buy nearly 2,200 stores and other assets from Rite Aid.

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