CVS changes name, stops tobacco sales early
ARLINGTON, Va. (AP) - As CVS sharpens its focus on customer health, the nation's second-largest drugstore chain will tweak its corporate name and stop the sale of tobacco nearly a month sooner than planned.
CVS Caremark said it will now be known as CVS Health, effective immediately. The signs on its roughly 7,700 drugstores won't change, so the change may not register with shoppers.
However, those customers will see a big change when they check out. The cigars and cigarettes that used to fill the shelves behind store cash registers have been replaced with nicotine gum and signs urging visitors to kick the tobacco habit.
A store in downtown Indianapolis also stocked free tobacco quit packs where cigarettes used to sit. The red-and-white boxes, nearly the size of a cigarette pack, contain coupons, a card showing how much a smoker can save by quitting and a booklet with Sudoku and other games to distract someone fighting the urge to smoke.
CVS and other drugstores have delved deeper into customer health in recent years, in part to serve the aging baby boom generation and the millions of uninsured people who are expected to gain coverage under the federal health care overhaul. While competitors Walgreen Co. and Rite Aid Corp. still sell tobacco, they've all started offering more health care products and added walk-in clinics to their stores while expanding the care they provide.
Drugstores now offer an array of vaccinations and flu shots, and many of their clinics can help monitor chronic illnesses like diabetes or high blood pressure.
"We're doing more and more to extend the front lines of health care," CVS CEO Larry Merlo said.
CVS still stocks its shelves with sugary snacks and other foods that are considered unhealthy. But company executives have been quick to point out that while chocolate bars in moderation pose little health risk, no amount of tobacco is considered safe.
The CVS corporate name change reflects the health push while removing a reference to the company's biggest revenue producer, its Caremark pharmacy benefits management.
The name Caremark, however, had never really registered with the average person, according to Laura Ries, president of the brand consulting firm Ries & Ries.
CVS, which is ranked 12th in the 2014 Fortune 500, announced in February that it would phase out tobacco sales by Oct. 1 because it could no longer sell smokes in a setting where health care is offered.
The CEO at CVS has said that the company expects to lose about $2 billion in revenue annually after pulling tobacco from its shelves, but executives believe they can counter that loss at least in part through growth the company may get from health care. Merlo declined estimate how much of a benefit CVS expects.
The potential revenue loss hasn't spooked investors so far. CVS shares have climbed about 22 percent since the tobacco announcement. Shares rose 83 cents to $80.56 in afternoon trading.