Walgreens CEO Roz Brewer: Tobacco sales under ‘real scrutiny’ as drugstore chain steps up health-care focus

Walgreens Boots Alliance CEO Roz Brewer said the drugstore is taking a hard look at whether it will continue to sell cigarettes and tobacco products as it steps up its focus on health care.

“We are thinking about what’s next in our stores,” she said in an interview with CNBC’s Bertha Coombs that aired Thursday. “And how do we really project a healthy-for-you profile when you enter our stores? Tobacco is one of those areas that’s under real scrutiny right now. And so you’ll see more to come in that area.”

Walgreens beat Wall Street’s expectations on Thursday for fiscal fourth-quarter earnings, as it got a lift from Covid-19 vaccinations. Sales in the three-month period reflected the strength of health and wellness-related merchandise, such as at-home Covid tests, vitamins and over-the-counter medications for cough, cold and flu.

Comparable retail sales rose 6.2% in the fourth quarter compared with the year-ago period. That increased to 7.2% when the company excluded sales of tobacco and e-cigarettes.

For years, Walgreens has been under scrutiny from some investors and public health officials for selling the products. Walgreens has scaled back tobacco-related merchandise, such as stopping sales of e-cigarettes. It also raised the tobacco buying age to 21 in 2019 after the Food and Drug Administration alleged that the drugstore chain was selling to minors.

Yet its major competitor already took tobacco off shelves. CVS Health stopped selling cigarettes and related products in 2014, saying it did not align with the company’s health-care mission.

The FDA has taken a tougher stance on e-cigarettes, amid concerns that vaping is leading to a rise in tobacco use among teens — especially with flavors like candy, fruit and mint. Early this week, it approved an e-cigarette brand for sale in the U.S., saying it could benefit some adult smokers who switch products. However, it did not approve some of the company’s flavored products.