Walmart to Cease Cigarette Sales in Some Stores

Bentonville, Ark.-based Walmart will stop selling cigarettes in some of its 4,700 U.S. stores, including some markets in California, Florida, Arkansas and New Mexico, The Wall Street Journal reported March 28, citing people familiar with the matter. 

The move follows years of debate within Walmart's leadership ranks about the sale of tobacco products, the Journal said. The paper said for years Walmart CEO Doug McMillon has challenged other executives to find a way to stop selling tobacco. 

Walmart will remove tobacco products from select locations where the retailer has decided to use the space more efficiently, according to a Walmart spokesperson cited by Journal. Some stores have more self-checkout registers or grab-and-go food and candy items near the front of stores, in place of Marlboro, Newport and other tobacco products  

“We are always looking at ways to meet our customers’ needs while still operating an efficient business,” a Walmart spokesperson told WGB sister publication CSP. “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.”

This is similar to CVS’s announcement in 2014 to stop selling tobacco products. Tobacco sales are also under scrutiny at Walgreens.

According to Goldman Sachs, convenience stores will likely be the biggest share gainers of this move. C-stores represent about 75% to 80% of cigarette sales in the United States, according to a note from New York-based Goldman Sachs Managing Director Bonnie Herzog. Goldman Sachs estimates that Walmart cigarette sales represent less than 5% of cigarette industry volume.

“Overall, we believe this decision will have no impact on tobacco manufacturers as smokers will still purchase cigarettes, and they will simply go to other retailers such as convenience stores, dollar stores and tobacco shops,” Herzog said.

• A version of this story appeared on CSPDailyNews.com.