19% of the population smokes. CVS is saying to 19% of the population that they don’t want their business. (and this does not include the business they will lose from people like me who are non-smokers but are pi&&ed t these types of moves)
If you think that is a good move in any way, then I have a bridge to sell you.
It sounds to me that they’re moving from a low margin offering (tobacco) to a higher margin one (health services). They’re saying that initially the increased revenue from the higher margin one will completly offset the los revenue from the ditched lower margin one. And in the long term, as tobacco use decreases while the need for health services increases, it’ll be more profitable.
In the absence of the details of whatever market research they have to support the decision, that’s not illogical or unreasonable.
Have a CVS store near me. Been told their average daily gross, excluding their pharmacy, is around $8,000.
Eliminating tobacco sales is certain to hurt this number.
A number that falls every year. How long do you support a dwindling part of your business? How long do you chase a shrinking customer base instead of putting your resources into something that's growing?