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The Marlboro Man is missing from some Walmart stores — and tobacco stocks are swooning as a result.
The retail giant has quietly pulled cigarettes from its shelves at some stores in Arkansas, California, Florida and New Mexico, with chief executive Doug McMillon advancing his mission to get rid of tobacco products as Walmart increases its investment in healthcare services.
Tobacco stocks immediately reacted, with shares of Altria Group down 3.5%, British American Tobacco down 1.6% and Phillip Morris International down 2.2% on Monday morning.
It’s not clear why stores in those states in particular were targeted for having their cigs removed or how many stores are affected. A source close to the matter says it’s a store-by-store decision. And not everyone at the Bentonville, Ark. retailer agrees with McMillon’s stance.
Some top Walmart executives say that Walmart is in the business of selling products its customers want – not limiting their choices, even if they have bad health consequences, according to the report.
Target stopped selling cigarettes in 1996 while CVS Health Corp. stopped in 2014, arguing that the tobacco didn’t jibe with its goals as a heathcare provider.
Walmart considered exiting cigarette sales after CVS’s announcement but decided that selling them was in “keeping with the retailer’s brand as serving the mass market,” according to a 2019 New York Times report.
But the company did yank e-cigarettes and vaping products from its shelves at in 2019 and it raised the age to buy tobacco products to 21 from 18.
McMillon reportedly has been quietly advocating for getting rid of all tobacco products, according to Journal report. And in 2018, many Sam’s Club stores – Walmart’s warehouse chain – stopped selling tobacco products.
Still, after years of decline, cigarette sales rose during the pandemic.
Walmart has also installed more self-check out stations over the past couple of years, making it more problematic for store employees to retrieve cigarettes from behind locked counters for those customers who are using self-checkout, sources told the Wall Street Journal.
The company said it is using the space “more efficiently” in the stores where it has removed cigarettes, according to The Journal.
On the removal of smokes from certain stores, a Walmart spokeswoman said: “We are always looking at ways to meet our customers’ needs while still operating an efficient business. As a result of our ongoing focus on the tobacco category, we have made the business decision to discontinue the sale of tobacco in select stores.”
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