Walmart took a stance Friday, confirming it will stop selling e-cigarettes and other vaping products. The move marks a clear stance on a public health issue that has made headlines thanks to a rise in use by young consumers, potentially deceptive marketing practices by manufacturers, extensive lung damage in some users and unknown long-term health effects.
In an email, a Walmart spokesperson cited “the growing federal, state and local regulatory complexity and uncertainty regarding e-cigarettes,” but did not respond to subsequent questions.
Like Walmart’s recent policy change on banning certain types of guns and ammunition, it will “complete [its] exit after selling through current inventory.”
Walmart’s share of the market was not immediately clear, but data from market research firm Euromonitor shows the business of e-vapor products in the U.S. has grown from $1.1 billion in 2013 to $6.8 billion in 2018.
Gartner analyst Chris Ross said while Walmart’s decisions on both guns and e-cigarettes reflect public safety issues, they are really two very different situations.
“The gun issue is highly charged and is unfortunately a long-running issue in terms of public safety,” Ross said. “The e-cig issue is relatively recent [and] not nearly as controversial.”
That’s because it’s unlikely there are any e-cigarette lobbying groups on par with gun lobbyists that may raise issues with Walmart, Ross said.
Retail analyst Bruce Winder agreed e-cigarettes do not have the political baggage of guns and ammunition. Instead, an e-cig ban reinforces Walmart’s role in protecting America’s youth, so the risk of alienating customers is low.
“Walmart’s core customer is families, and this move reinforces that they are putting families before profits,” Winder added.
But it may also be a case of Walmart protecting its own interests.
“A skeptical view of this might also [be to] see this more as a risk mitigation issue versus a ‘doing good in the world’-issue,” Ross added. “Selling a product that, based on recent public information, appears to be potentially dangerous or life-threatening to some could create potential liability issues.”
That’s why, regardless of revenue, the risk-reward equation may be clearer for Walmart on e-cigarettes than guns.
Plus, Winder said, the loss of sales is insignificant compared to the public perception of supporting a harmful product.
“I can’t see many customers being upset with this decision,” he added.
Cigarette non grata
Even the federal government has weighed in. In a new National Youth Tobacco survey, Department of Health and Human Services Secretary Alex Azar said the U.S. has 5 million underage e-cigarette users, who are drawn to flavored products in particular. That’s why the Food and Drug Administration plans to remove all flavors other than tobacco from the market.
In a statement following this White House announcement on Sept. 11, e-cigarette company Juul said, “We strongly agree with the need for aggressive category-wide action on flavored products. We will fully comply with the final FDA policy when effective.”
E-vapor business Fontem Ventures, which manufactures e-cigarette brand Blu, on the other hand, said it believes there could be unintended consequences: “These include deterring adult smokers from trying vaping, potentially encouraging adult vapers to return to smoking, growth in DIY or illicit flavor-making, and the potential development of an illicit trade in flavored e-liquids or flavor agents.”
When rapid consumer adoption might be a bad thing
In other product categories, a rapid rise in consumption is usually something for marketers to celebrate. According to Ned Sharpless, acting commissioner of the Food and Drug Administration, however, the e-cigarette industry’s success is a result of “irresponsible practices of the manufacturers, who have targeted kids.”