Walmart closes dozens of locations for this key service

It's an interesting time to be in the retail industry.

First, it was the decline of the traditional indoor shopping mall, which has halted business for a lot of legacy retailers that do most of their business from those once-iconic confines.

Stores like like JC Penney, Macy's, Express, and Rue21 have either filed for bankruptcy, shuttered stores, or both as mall foot traffic dries up.

But consumer zeal hasn't evaporated entirely. It's simply shifted. And thanks to Covid, the shift has accelerated, mainly to large corporate stores like Walmart (WMT) and Target (TGT) . And of course, online shopping at places like Amazon (AMZN) take a larger portion of U.S. retail sales by the year.

After a big growth spurt over the past several years, these larger retail giants have been forced to figure out how to continue such a massive growth trajectory. After all, there are only so many Americans you can capture and sell groceries to before the market gets saturated.

Walmart's recent expansion was a good idea

One of the stickiest – and most costly – areas in the U.S. is health care. It can be costly to get an appointment at an urgent care clinic for something like an X-ray or rapid diagnostic test, and often you have to go to multiple locations afterward, for things like prescriptions and follow-ups.

This area seems ripe for disruption. At least that's what Walmart and Amazon think.

Amazon has been keen to expand both its brick and mortar and its online medical services. It acquired One Medical in 2023 for $3.9 billion. And it continues to expand its online pharmacy capabilities. It wants to be your one stop shop for drugs and check ups.

The interior of a Walmart Health center. Lead.
Walmart

Walmart has taken a similar approach. It already has 4,600 pharmacies inside its stores, but it has been trying to expand its high-touch interactions with potential patients with the launch of its Walmart Health centers.

A sample of Walmart Health centers, of which the retailer operates approximately 50, features the following care options:

Same-day primary care
Primary care by appointment
Dental
Behavioral health
Labs
X-rays
Community health
Telehealth

Walmart shuttering all health centers

Given Walmart's physical prowess across the country, it would be surprising to hear that the centers have been a drag on its resources. The health centers, which are typically over 5,000 square feet and operate in states including Arkansas, Florida, Georgia, Illinois, Missouri and Texas, were glimmering examples of a potential new wave of health care and one-stop shopping.

In April, Walmart even announced it planned to add 18 new Walmart Health Centers in Texas in 2024 alone.

More Walmart:

It's surprising, then, that Walmart has changed its tune completely since then. It announced on April 30 that it would shutter all 51 of its health centers and sunset its entire health division.

We determined there is not a sustainable business model for us to continue," Walmart said in part.

Walmart will still operate its 4,600 pharmacies and over 3,000 vision centers. All associates affected by the closure will be eligible to transfer to other Walmart locations or receive 90 days of pay and severance benefits.

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