According to the news report by MarketWatch, Walgreens Boots Alliance Inc. is giving in somewhat to pressure from some investors as well as federal regulators and testing tobacco-free stores in the United States. However, it does not plan to stop its cigarette sales completely.
During a recent interview, the Chief Executive Officer of the company Stefano Pessina stated that while patients’ health and safety was very important, the company also needed to do what their customers wanted. He continued that when the company did not sell tobacco, it faced an adverse reaction from its customers.
This issue of Walgreen-Boots selling tobacco at its chain of stores was brought up during the annual shareholder meeting in January, as well as subsequent meeting in February. Both times, the US FDA (Food and Drug Administration) accused the company of selling tobacco-based products to minors.
The outgoing FDA Commissioner, Scott Gottlieb stated that when his agency had conducted undercover checks at the Walgreens stores, it was found that around 22% of the approximately 6,000 stores that had been inspected were selling tobacco to minors.
In that time period, a group of Senators also sent the CEO of Walgreens-Boots – along with other tobacco retailers – urging them to stop the sale of tobacco products in their stores.
Pessina stated that while it still sells cigarettes in most of its stores, the company is also helping people quit by offering a wide range of smoking cessation products in all its stores. He also said that their employees had been instructed to direct customers coming to buy cigarettes to the cessation products. Additionally, the pharmacy chain major also cut down on the visibility of tobacco products in some of its stores.
Pessina stated that the company’s objective was to convince people to give up smoking. Therefore, when customers were sold cigarettes, they also asked whether they wished to give up the habit.
Now, as a part of a 12- to 18-month pilot program that was launched in 2018, certain stores in the company’s chains no longer sell or stock tobacco products. A test store in Deerfield, Illinois, close to the company headquarters was the first store to stop selling tobacco products.
17 stores in Gainesville, Florida, as well as stores in the state of Massachusetts, and the cities of San Francisco and New York no longer sell tobacco products also. However, in the case of the last three locations, there is a ban on the sale of cigarettes in pharmacies, so it is moot point.
Interestingly, outside the North American region, the Boots’ pharmacies do not sell any tobacco products. However, Walgreens sells tobacco products, including electronic cigarettes in almost all of its approximately 9,600 stores in the US. CVS Health Corp., the company’s biggest rival, on the other hand, stopped the sale of tobacco products in 2014.
Most tobacco products in the US are still sold at gas stations as well as convenience stores rather than pharmacies. In 2017, drugstores only accounted for 1.7% of all cigarette sales across the US. The drugstores also accounted for 39% of all cessation product sales for the same time period.
While some activist investors as well as antitobacco advocates have been putting pressure on Walgreens to stop selling tobacco products in the company’s North American stores since these products do not belong in health stores, other investors contend that stopping the sale of these products could hurt their investments with threats of lawsuits.
While Pessina did not reveal how much money the pharmacy chain makes on the sale of cigarettes, he did say that the overall sales of tobacco products was steadily going down in their stores.