ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, August 29, 1996 TAG: 9608290059
SECTION: BUSINESS PAGE: B8 EDITION: METRO
MINNEAPOLIS - Target Stores, a discount chain operating stores in the Richmond and Tidewater markets, said Wednesday it is getting out of the cigarette business and plans to have all packs off the shelves of its 714 stores by the end of September.
The company said the move was based on economics, not ethics.
Requirements in many cities that cigarettes be sold from areas off-limits to minors, coupled with heavy shoplifting, have squeezed profit margins on cigarettes so hard that they have become unprofitable for Target, spokeswoman Carolyn Brookter said.
``It just didn't balance,'' she said.
Cigarette sales generated less than one-half of 1 percent of Target's 1995 revenues of $15.8 billion, or about $79 million, Brookter said.
Target officials quietly made the decision to quit selling cigarettes several months ago and did not plan to announce it formally, although they did notify tobacco companies that they would no longer order cigarettes, she said.
Tobacco industry officials said the decision was Target's prerogative, but cigarettes generally are very profitable for retailers.
Maura Ellis, spokeswoman for RJR Tobacco Co. in Winston-Salem, N.C., said she expects that smokers will simply buy their favorite brands elsewhere. -Associated Press Kmart to launch its own credit card
DETROIT - After a successful marketing test, Kmart Corp. said it will launch its own credit card in an attempt to attract more customers.
The card has no annual fee and features up to a 6 percent rebate, but the interest rate is 13.15 percent plus the current prime rate, which puts the rate currently at 21.4 percent.
A test program in March found that cardholders shopped more often and spent more on average than non-cardholders. Kmart is outsourcing credit operations to Beneficial National Bank USA, a unit of Beneficial Corp. -Knight-Ridder/Tribune AT&T to postpone its Virginia entry
NORFOLK - AT&T Corp. said it has not been able to work out an agreement with Bell Atlantic and will delay plans to provide local telephone service in Virginia until mid-1997.
The two companies still have major differences over the price AT&T will pay to use Bell Atlantic's network, AT&T said. AT&T plans to resell the services under its own name initially, but Bell Atlantic has agreed only to a 10 percent discount on the service.
The State Corporation Commission has until Dec. 1 to resolve problems between the two companies. -Associated Press
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