Costco Quits Tobacco, But Not Cold Turkey

Compared to the mid-20th century when movie stars were paid to smoke on screen, tobacco products have a much different reputation among average American consumers — so much so that some retailers don’t see the point in carrying them any more.

TheStreet reported that Costco has been letting tobacco sales at stores across the country slowly dwindle without replenishing stockouts, according to comments made by the retailer during a recent investors call. Unlike CVS, which captured headlines and several news cycles in 2014 when it announced that it would be pulling all tobacco products from its shelves, Costco made no official announcement about the policy change. In fact, a Costco spokesman told TheStreet that this policy of tobacco stock diminishing began three or four years ago.

When asked about the absence of a press release explaining the move, the spokesman replied, “We don’t do releases at Costco; they are a waste of money.”

On the investors call, Costco noted that tobacco sales had dipped by a figure in the low double digits, though it didn’t release the final share of its sales for the retailer. However, judging by the less-than-pro-tobacco comments made by the spokesman, odds are Costco can see those sales fall by the wayside and be just fine.

“Tobacco is a very low-margin business, tends to have higher theft and is labor-intensive in some cases [due to local municipality regulations],” the spokesperson told TheStreet. “Further, we felt we could better use the space to merchandise other items.”

Costco has no plans to pull tobacco items from its warehouses, but current numbers have just 189 of its 488 U.S. storefronts stocking the items to date. The retailer offered no timetable for when it might be completely tobacco-free, which is just what an “ex” smoker who sneaks cigs out on the back porch would say.