When I read the Feb. 6 news article about the CVS decision on tobacco, I wondered why it was front-page and not financial news.
CVS reached the point in tobacco sales that the shelf space devoted to tobacco generated less revenue/profits than was acceptable, which is how drug stores, grocery stores and other businesses make their decisions about product placement and items they stock. It is news to its investors that CVS is attempting to improve its bottom line, while using the media to announce it also gives it some good free public relations.
Don’t expect other major chains to follow CVS because they will now be splitting the CVS market share, and their revenue/profit per foot of tobacco shelf space will increase, which will push their decision to drop tobacco further into the future.
While I agree with most of the Feb. 7 letter “Kudos to CVS,” unfortunately the CVS decision was still financial. The public benefit is a result that had very little to do with the decision process.
While I am looking at CVS’s decision-making, I cannot help but wonder whether ad revenue from CVS had any part in deciding how to report this news and where to place the article.