CVS might want to take this moment to remember that time-honored expression about no good deed going unpunished.
The retail drugstore chain recently announced that it would stop selling cigarettes and other tobacco products in its stores October 1. “CVS quits for good,” read a graphic on its Facebook page, which garnered no fewer than 350,768 likes by February 10.
President Obama issued a statement praising the decision. And on the Woonsocket, Rhode Island-company’s Twitter page, there were congratulatory tweets from world health philanthropist and Microsoft founder Bill Gates, former New York City Mayor Mike Bloomberg, actress Kristen Bell and House Minority Leader Nancy Pelosi.
In any PR playbook it was a home run, with generally positive media coverage from The New York Times, USA Today, Politico, CNN, Yahoo! News, Fox, Huffington Post, The Daily Beast, Daily Mail and The Washington Post, among others. The company’s social conversation alone spiked 2,000+ percent on the day of the announcement versus the day before, according to FleishmanHillard’s black box social monitoring data. Likewise, the company’s buzz and brand score on YouGov climbed as well.
And the news resonated with potential implications for the company’s bottom line. FleishmanHillard TRUE asked 1,000 people via Google survey about whether they were aware of CVS’s decision to stop selling tobacco products and a stunning 55 percent acknowledged that they had seen and remembered the coverage. In a second question, TRUE surveyed 1,000 people about whether they were more likely to shop at a store that had removed cigarettes from the shelves: 21 percent said yes they were, with 10 percent saying they were less likely and 69 percent saying they didn’t care.
But wait. There’s always Day 2 to every story. While CVS showed the courage to act first, voices — some influential — are now asking the company to do more.
Two days following the announcement, The New York Times ran commentaries by four women authors and activists urging the drug store chain to dump other products they considered unhealthy such as junk foods, soft drinks and even toxic cosmetics. One of the writers—the executive director of the American Association of Pro-Life Obstetricians and Gynecologists—even brought the politics of abortion into the debate by urging CVS to dump emergency contraceptives, such as Plan B.
They weren’t alone with comments sprinkled through CVS’ social feed raising similar questions about the company’s sales of beer, soda and snacks and the health implications of those foods. Currently, CVS is dealing with the questions by pointing out that in moderation alcohol and junk foods don’t pose the kind of health risks that cigarettes do. While that is a consistent position, the situation will require close monitoring, particularly if the debate turns political.
Investors seemed unperturbed by the announcement that the cigarette decision puts at risk $2 billion in revenue, moving the stock minimally up and down 1 percent in the days following. While an impressive revenue number, it only represents 2 percent of the company’s sales, and some analysts believe that freeing up the shelf space now dedicated to tobacco will end up allowing the chain to stock even more profitable products. The cigarette decision also fits into a bigger rebranding at CVS—to make it more of a healthcare company than a retailer with the increasing availability of clinic care throughout the chain.
One question still remaining is whether CVS rival Walgreen will follow. There is some chatter on the company’s social urging it to drop cigarettes, too, and the company has said it is considering it. If Walgreen moves before October 1 when the cigarettes come off the shelves at CVS, will CVS lose the edge it may have with some shoppers who said they would prefer a store that doesn’t sell tobacco products? Or will CVS maintain its distinction for having the courage to make the move to drop cigarettes first?
Graphic credit: CVS.com