Target Stores to Stop Selling Cigarettes
In a sign that major retailers are beginning to feel the heat of anti-smoking sentiment, discount giant Target said Wednesday that it will eliminate cigarette sales by the end of September at all 714 of its U.S. stores.
The decision, believed to be the first of its kind by a large retail chain, reflects the growing stigma attached to smoking and mounting pressure to comply with laws barring the sale of tobacco to underage youths.
Given the country’s deepening anti-smoking mood, Target, the nation’s third-largest discount department store chain, could reap a whirlwind of favorable publicity without much downside, as cigarettes account for less than 1% of sales. Retail analysts and tobacco foes said the decision may prompt other retailers to abandon the cigarette trade.
Target called the move “a business decision,” saying that higher personnel and equipment costs to comply with tougher curbs on sales to minors had reduced the profitability of cigarette sales.
“We’ve had declining profits on cigarette sales for quite a few years,” said Target spokeswoman Gail Dorn.
But tobacco foes, who lauded the move, said they believed that concern about the health toll of smoking influenced the decision--and that Target stressed business motives to avoid getting caught in the middle of the escalating smoking war.
“I think this is a large retailer putting public health above its short-term profits,” said Matt Myers, executive vice president of the National Center for Tobacco-Free Kids in Washington.
“This is fantastic,” said Dan Maier, spokesman for the American Medical Assn. in Chicago. “Clearly, there’s a lot of kids going through these retail stores, and the less we . . . expose kids to tobacco sales [and] tobacco advertising, the better off they are.”
Word of the decision came less than a week after the Clinton administration’s landmark announcement of new Food and Drug Administration rules meant to curb youth-oriented tobacco marketing. The measures, which face a court challenge by the industry, include a ban on sports sponsorship by tobacco companies and restrictions on cigarette ads in publications widely read by teenagers.
Tobacco officials, reportedly advised of the move by Target several weeks ago, shrugged it off Wednesday, saying the impact will be insignificant.
It simply means “that smokers who picked up . . . cigarettes at Target are now going to pick them up someplace else,” said Brennan Dawson, spokeswoman for the Tobacco Institute in Washington.
Officials at Wal-Mart and K-Mart, Target’s main competitors, said they will continue selling cigarettes. But some analysts predicted that these and other chains will consider following Target’s lead.
“On balance, the impact [on Target’s business] will be favorable,” said Kurt Barnard, a New Jersey-based retail economist. “Nonsmokers outnumber smokers, and more and more consumers are becoming fervent in their anti-smoking position.”
In general, convenience stores and other retail outlets are far more dependent on cigarette sales than mass merchandisers like Target. In 1995, Target’s cigarette sales were $73 million--about one-half of 1% of the chain’s total revenues of $15.8 billion.
Target, a subsidiary of Dayton Hudson Corp., is the second big firm in recent months to abandon the cigarette business. Last spring, 3M Media, a unit of Minnesota Mining and Manufacturing Co., said it will phase out sale of billboard space to cigarette makers.
The move comes against a backdrop of tightening controls on illegal tobacco sales to youths--and the growing threat of fines and negative publicity for retailers caught breaking the law.
All states bar tobacco sales to youths under 18, but historically these have been among the most widely ignored laws in the country. Until recently, Utah and Minnesota were the only states where merchants in significant numbers were fined for illegal tobacco sales to kids.
Change has come with federal legislation passed in 1992--and implemented this year--that forces states to crack down on illegal tobacco sales or lose millions of dollars per year in federal grants for alcohol and drug abuse treatment. As a result, many states have begun running stings in which underage teenagers, working with law enforcement agencies, attempt to buy cigarettes from retailers, who are fined if they make the sales.
Minnesota, where Target is based, has long been a hotbed of such activity, and the chain had come under attack by tobacco opponents for purportedly failing to keep youngsters from buying or stealing cigarettes.
Target stores had “no effective barriers to children stealing or purchasing cigarettes, so this is just a wonderfully awesome change for them, and we hope other department stores will follow suit,” said Jeanne Weigum, president of the Assn. for Nonsmokers-Minnesota.
Appeals from anti-smoking groups were not a factor in Target’s decision, Dorn said. But she said the crackdown on youth sales imposed higher costs on Target. She said that in some cases it has meant installing new display cases and keeping cigarettes under lock and key to prevent pilferage, increasing labor costs to service smokers.
Target began a quiet retreat from tobacco two years ago when it decided not to sell cigarettes at newly opened stores, and to remove cigarettes from some stores with unusually tough local ordinances. About 20% of the company’s stores do not offer cigarettes.
Mass merchandisers such as Target and K-Mart rang up cigarette sales of $1.36 billion during the past year, according to figures from A.C. Nielsen--or less than 3% of total U.S. tobacco sales of about $50 billion. Supermarket and drugstore sales had about $6.07 billion and $1.56 billion, respectively.
