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Family Dollar’s Plan to Sell Cigarettes Draws Fire

Public health advocacy groups ask the company to reconsider


Family Dollar‘s (NYSE:FDO) decision to sell cigarettes at its 6,800 stores nationwide has drawn considerable criticism from health and anti-smoking advocacy groups.

This week a coalition of health groups, including anti-smoking group Legacy, sent a letter to Family Dollar, expressing “dire disappointment” with the company’s plans and requesting that Family Dollar’s CEO reconsider the decision.

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In the letter, the groups say that because Family Dollar stores serve working class communities, which have been heavily targeted by tobacco company advertising, the company is increasing access to a potentially harmful and addictive product.

The company announced plans to introduce cigarettes and tobacco products to its shelves back in March.

Wall Street analysts hailed the plan as a good way to boost the company’s bottom line and attract new customers to its stores, Business Insider said.

Advocates accused the company of putting profits before the health of its customers.

Family Dollar representatives have responded to the criticism by arguing that the company is responding to the demands of its customers, who comprise a higher percentage of smokers than the general population, McClatchy Newspapers noted.

The company reported fiscal second-quarter profits of $136.4 million, a quarterly record for Family Dollar, on revenue that grew 8.6% from the same time in 2011 to $2.46 billion.

Family Dollar has recently made a push into the grocery business, with an increasing percentage of its overall sales coming from food products.

Article printed from InvestorPlace Media,

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