Anti-smoking advocates notched a big victory when CVS Caremark (NYSE:CVS) declared earlier this year that it would stop selling cigarettes in its retail pharmacies beginning in October, sacrificing an estimated $2 billion in sales because selling cigarettes is "inconsistent with our purpose – helping people on their path to better health," according to the CVS website.
Now 28 state attorneys-general are urging competing pharmacies Rite Aid (NYSE:RAD) and Walgreen (NASDAQ:WBA), grocery stores Safeway (NYSE: SWY) and Kroger (NYSE:KRG), and big box retailer Wal-Mart to follow CVS' lead and end cigarette sales. The letters follow CVS' reasoning precisely, declaring that "there is a contradiction in having these dangerous and devastating tobacco products on the shelves of a retail chain that services health care needs." So far, response from these companies has been muted -- but pressure is starting to build.
In the following video, Motley Fool health care analysts David Williamson and Michael Douglass discuss the health care services available in these retail chains -- especially the work Rite Aid is doing in telemedicine -- and the impact of the letters. They also consider the biggest question on investors' minds as these companies contemplate their course of action: How much of a difference would dropping cigarettes make, and which companies will likely feel the most pressure to follow CVS?