CVS Stops Selling Cigarettes

CVS is no longer selling cigarettes at any of its 7,700 nationwide stores; company rebrands as CVS Health.
3:56 | 09/03/14

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Transcript for CVS Stops Selling Cigarettes
Okay. -- open in today's big number two billion as in two billion dollars up in smoke for CVS pharmacies. Starting today the drugstore giant will no longer sell cigarettes or tobacco products giving up two billion dollars in profits putting health first. And becoming the first big chain to do so -- -- I'm Dan Butler New York's here at the details. -- Rick Newman is joining us on this Wednesday morning Rick occasion of CBS opted for help your image over profits what prompted this move. Well I would say they're not putting profits on the side there I think they're actually thinking quite a lot about profits. They sell about two billion dollars worth of cigarettes every year their total revenue is about a 135. Billion. So that's less than 2% of their revenue and meanwhile. Look at -- opportunities there -- in health care we've got the Affordable Care Act some more people are gonna have coverage we got baby boomers retiring going into Medicare. It CVS is actually getting into the health care business they're not just selling products related health care anymore they have clinics. They have. They can help help treat certain things get flu shots and CBS I think what they're doing is they're hitting more toward getting into the health care delivery business. A little less away from the retail side. And it just makes sense in that regard. Why sell something over here that's gonna impact people's health over here are so you don't you don't go to you don't buy cigarettes and hospitals or doctors' offices so I think CBS is saying we wanted to be thought of -- that way so we're gonna stop selling cigarettes so this is also really a marketing move as well religious position is up beyond just being a retailer. Yes sure it is and I think what this tells you is a mean we think it's no secret that. Smoking has been declining. As an activity and obviously declining in popularity for a long time mean the reason you know stores still sell cigarettes simply because it's profitable but it's less -- less profitable. Fewer people are buying cigarettes. You know you can't smoke in restaurants anymore and a lot of places. So this seems just part of an inevitable trend. And you know it probably was time for CBS finally say you know where we it we can wean ourselves off -- this. Product that provides some -- some profit but we're gonna make it up on the on the other side over here and also a name change coming along with -- as well. While it's gonna become CBS health. And they're not gonna take down all there signage and put up new signs just add the word health so it's not something consumers will necessarily notice or at least not notice right away. But that tells you what they're thinking I mean their reorient an ample -- -- themselves. In terms of their image and also in terms of the services and products they sell. To be more of a health care business -- other big drug stores following suit on this. Well Walgreen is the biggest -- in this market. And they have not done this yet but I think it's reasonable to expect they will probably follow I guess watering can say. You know if people aren't gonna buy cigarettes at CBS maybe -- come to us because there certainly are places where. You have a CVS and Walgreen. They're fairly close to each other -- maybe. Laundering complaint that way but I think that's just on the wrong side of the of the trend here. It you know the pressure's -- -- only -- amount on other retailers. This could -- this could even extend to grocery stores and who knows convenience stores at some point other places that sell cigarettes. So my guess is that a laundry and other. Other companies are thinking exactly the same thing which is we want to go over the big money is -- weather's going to be more money in the future and that's health care services. And this is a declining revenue stream anyway so -- commit to that. We have to wait -- -- a -- from Yahoo! finance on this Wednesday morning Rick thank -- so much appreciated it and see if -- coursing keep up with latest headlines right here on Eagle watching the big number and -- that's where New York.

This transcript has been automatically generated and may not be 100% accurate.

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