For some time, Costco has sold tobacco products in its 489 United States stores. However, it seems that Costco has begun to phase out tobacco products from many of these stores. It now only sells the products in 189 of the U.S. stores. The “phase out” has been happening for about three to four years.
Many companies have been taking tobacco off the shelves recently. Because of the long-lasting health consequences tobacco can cause, many companies have begun taking it off the shelves as a stance against tobacco companies.
Companies like CVS took the products off their shelves as a moral stance in their prospective communities (also, it seems kind of silly for a health and drug store to carry something so bad for you). According to a study conducted after CVS made its change, the average smoker purchased five fewer cigarette packs. CVS wanted to be recognized for trying to help cut down on the amount of cancer and other disease caused by tobacco. Just last week, CVS announced it would be donating to anti-smoking campaigns.
Another larger company, Target, quit selling tobacco products in 1996 (one of the first to do so). Some companies have used cutting tobacco products as a way of bringing in a different clientele for many companies.
In Costco’s case, according to a spokesman, they simply removed the tobacco products because the space could be better used for other products. Unlike CVS, Costco did not make any big announcement about the change. It simply faded the products out of the stores. The “low key” fade-out was intentional though.
Costco’s decision, as previously stated, was not a moral decision though. The company’s CFO Richard Galanti said sales of tobacco products were “negative in low-double digits as we continue to eliminate tobacco SKUs from various locations.” So, fading out tobacco products should not affect the company’s overall wellbeing. However, there are many other changes occurring within the company that has been affecting stock a bit.
Overall uncertainty surrounding Costco may have caused stock in the company to become stagnant, although market researchers don’t believe that will be a lasting trend. It has seen many highs and lows within the first part of the year, however, 2016 is likely a year to see huge growth in the wholesale club.
With its decision to switch to Visa, making Visa cards of any kind accepted in its stores and changing its co-branded credit cards to Visa as well, Costco is likely to see an influx of memberships later in the year. The change, slated for June, will be the largest move within Costco this year.
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For more info on Costco check out these articles.
You can check out our articles for Target as well.
Photo: Flickr: Vik-Thor