The day after the Super Bowl is worse than any sick day or hangover. On the day of the big game, you have all the excitement in the world: great food, drinks, big-budget commercials, over-the-top halftime shows and the biggest football game of the year. The day after, whether you imbibed in some adult drinks or not, is rough. You’ve just been given all the glamour, glory and gluttony TV can provide in the span of four-ish hours, and now you’re expected to go to work? It sucks! It’s not all bad though; most companies have had a rough week after the Super Bowl too. Let’s read all about it in This Week in Financial Blunders.
Smoke ‘Em While You Got ‘Em
In an unprecedented move for any major drug store, CVS Pharmacy will stop selling all tobacco products by October 1 of this year. USA Today reports that across CVS’s 7,600 stores, CVS Pharmacy makes approximately $2 billion from the sales of tobacco and tobacco-related items, roughly 3% of their overall sales. It may seem a bit reckless for a company to drop a product that pulls in a significant profit, but Helena Foulkes, pharmacy president of CVS, assured it was a moral decision alone. “Selling tobacco is very inconsistent with being in [the pharmacy] business … We really thought about this decision as it relates to the future as a health company – it’s good for customers and our company, in the long run.”
CVS higher-ups say the bottom line is that dropping tobacco won’t affect their business too much. Responses from tobacco companies came out as expected (polite and understanding-sounding) and Morgan Stanley stated that CVS only accounts for 2% of the industry’s business. The real concern is whether or not CVS is starting a trend in the drug store world; if it is, then it could be horrible news for the long-standing tobacco industry.
Economy Killed the Radio Star
Despite airing one of the few Super Bowl commercials that was universally well received, RadioShack had some disappointing news this week. Multiple sources have leaked that the electronics chain store will close 500 of its 4,500 stores in the next few months. Buzzfeed Business emailed RadioShack for a comment and only received this in return: “RadioShack’s policy is that the company does not comment on speculation or rumor.” This neither confirmed nor denied the claim. If these store closings happen in the United States, it will add to the steady decline of RadioShack stores that started back in 2000. At that time, there were approximately 5,100 RadioShack stores, and if the closings go through as expected, there will be roughly 3,800 stores in the states.
That’s all the financial blunders we have for this week, but if we missed a story you’d like to talk about, just comment below.