On a purely cosmetic level, I would think that the public relations for CVS stopping carrying tobacco products is much better than the public relations of Walgreens for tax inversion.
Of course, most people won’t actually read beyond that to understand tax inversion. I’ll admit that I didn’t fully understand it until seeing Adam Fein’s post and reading up on it more myself.
But, the real question is whether any of this matters. In retail, it’s often location, location, location. Will consumers leave Walgreens because they move their headquarters? Will consumers come to CVS because they stop selling tobacco?
While I agree with IMS that loyalty is becoming more important than location for pharmacies to focus on, the historical reality is that pharmacy customers aren’t overly loyal. (see Empathica presentation)
Certainly, when Walgreens and Express Scripts had their issues, we saw lots of people forced to leave and the uproar was less than people expected. That helped fuel the limited network growth which built on the Humana and Walmart success.
At the end of the day, these big strategic decisions can have broad implications. But, wonks like me who follow this closely aren’t the audience that matters. It’s often the day-to-day consumer who might not care. They’re looking for the most convenient pharmacy that’s in network and has decent customer service. The majority don’t know the name of their pharmacist or believe that their pharmacist knows them by name. (I think it was only 16% could name their pharmacist in a study from years ago, but I couldn’t find it. I’ll share this post from a few years ago on the topic.) Either way, there’s lots of opportunity as this report shows.