Consumers hold CVS Health (CVS) in higher esteem than ever in the wake of the second-largest drugstore chain's decision to quit selling tobacco products. CVS says that decision will cost it $2 billion in annual revenue.
According to the weekly YouGov BrandIndex survey of 4,300 people, 13 percent of likely shoppers indicated that they would consider shopping at CVS the next time they plan to visit a drugstore. That's up from 9 percent earlier this year, although it lags the 15 percent rating of Walgreen (WAG), the top drugstore operator. No. 3 player Rite Aid (RAD) trailed both companies with 7 percent.
When the no-cigarettes news first broke in February, CVS' perception scores equaled Walgreen's for 10 days, according to YouGov BrandIndex.
None of CVS' rival pharmacy chain operators, including Walgreen, Rite Aid, Wal-Mart (WMT) and Kroger (KR), have followed CVS' lead on tobacco sales even though a coalition of state attorneys general and public health groups such as the American Lung Association have urged them to do so. Anti-tobacco activists have vowed to keep pressuring the drugstores to stop selling tobacco products.
CVS has never sold e-cigarettes, which vaporize tobacco instead of burning it, and are surging in popularity. They're widely available at various retail outlets including Walgreen, which has questioned whether pharmacies quitting tobacco would lower smoking rates, given that the sector accounts for only about 4 percent of overall sales.