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03/30/2022

Walmart Ends Cigarette Sales at Some Locations

Walmart has pulled cigarettes from some of its store shelves.
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Walmart storefront

The move comes after Walmart has been debating the issue internally. The news was first reported by The Wall Street Journal.

Executive Summary

Walmart is not the only retailer to drop cigarettes from its assortment. CVS Health announced it would stop selling cigarettes in 2014, at which time CVS leadership stated that selling the products went against the company’s purpose as a healthcare retailer. Walmart’s reach into the healthcare industry has grown over the past several years, but the retailer isn’t stopping all cigarette sales just yet. 

Sales will cease in select locations in California, Florida, Arkansas and New Mexico. In place of cigarettes, Walmart plans to use the space for self-checkout registers and grab-and-go items, such as snacks and candy. Cigarettes are actually less profitable than other front-of-store items, according to the people familiar with the situation. In addition, the need to keep cigarettes in a locked case away from shoppers, as well as employees being at least a specific age to complete cigarette sales, can limit profits.

Cigarette sales have risen since the onset of the COVID-19 pandemic, following years of declines. Walmart did not state how many stores will continue selling cigarettes.

“We are always looking at ways to meet our customers’ needs while still operating an efficient business,” a spokeswoman told the WSJ.

The decision has been an ongoing conversation among executives for years, with top executives deciding to start phasing out sales in some locations before the COVID-19 pandemic. Walmart CEO Doug Mcmillon has been vocal about other companies pulling cigarettes from their shelves without making the move at Walmart.

However, the move is not entirely new for Walmart. The retail giant began pulling back on gun sales over the past few years amid a rise in school shootings. In the aftermath of the school shooting in Parkland, Florida, Dick’s Sporting Goods announced it would stop selling semi-automatic rifles like those used in the shooting. Walmart raised the age to purchase guns to 21 at the same time in 2018. The retailer also discontinued the sale of ammunition used in semiautomatic weapons and handguns after a 2019 shooting in a Waco, Texas, Walmart.