Walmart shutting down health centers and telehealth service
By Eleanor Laise
Exit comes as other retailers also face headwinds in healthcare
Walmart Inc. said Tuesday that it is shutting down Walmart Health, which offered primary-care, lab and other services across 51 locations, as well as its telehealth service, Walmart Health Virtual Care, as some major retailers continue to struggle with their ventures into healthcare services.
The health centers and telehealth service don't have "a sustainable business model for us to continue," Walmart said in a release Tuesday, adding that a difficult reimbursement environment and rising operating costs eroded profitability.
Walmart's move underscores the headwinds that some retailers have faced as they try to offer primary-care and other health services. Walgreens Boots Alliance Inc. (WBA) late last month reported a second-quarter net loss that included a $5.8 billion charge related to VillageMD, the primary-care business in which it owns a controlling stake. E-commerce giant Amazon.com Inc. (AMZN) has also had hiccups as it pushes into the healthcare business, including its 2022 decision to shut down Amazon Care, a primary-care service.
The closure of Walmart Health represents a sharp reversal of Walmart's plan, announced just over a year ago, to aggressively expand the reach of the health centers. In a March 2023 statement, David Carmouche, Walmart's senior vice president of omnichannel care, said that in 2024, "we will be growing in a big way, opening 28 new Walmart Health center locations" with the aim of having 75 centers nationwide by the end of 2024.
The retail giant opened its first Walmart Health center in 2019.
Walmart has lots of potential in the clinic business, but success requires commitment to an economically sound model, said Craig Garthwaite, a professor and director of the healthcare program at Northwestern University's Kellogg School of Management.
Walmart said in its statement Tuesday that its optical business, which includes more than 3,000 vision centers, continues to grow, and that it has expanded the clinical capabilities in its nearly 4,600 pharmacies.
Healthcare center employees are eligible to transfer to other Walmart or Sam's Club locations, the company said.
Walmart shares (WMT) fell 1.5% Tuesday and have gained 12.8% in the year to date, while the S&P 500 SPX is up 6.4%.
-Eleanor Laise
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-30-24 1245ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
After Earnings, Is Home Depot Stock a Buy, a Sell, or Fairly Valued?
-
After Earnings, Is Baidu Stock a Buy, a Sell, or Fairly Valued?
-
Why Stocks Are Hitting Record Highs—and What Could Send Them Back to Earth
-
5 Stocks to Buy While They’re Trading at Big Discounts
-
Markets Brief: Tech Stocks Lead Ahead of Nvidia Earnings
-
How Anti-Obesity Drugs Are Innovating the Healthcare Market
-
What’s Happening In the Markets This Week
-
Why Immigration Has Boosted Job Gains and the Economy
-
Nvidia Earnings: AI Demand Smashes Expectations Again
-
After Earnings, Is Walmart Stock a Buy, a Sell, or Fairly Valued?
-
Target Earnings: Margins Hold Up, but Top Line Constrained by Weak Discretionary Spending
-
Is Berkshire Hathaway’s Mystery Stock a Buy?
-
After Earnings, Is Uber Stock a Buy, a Sell, or Fairly Valued?
-
Lowe’s Earnings: Tumultuous Macro Weighs on Near-Term Results but Fails to Sway Our Long-Term View
-
Macy’s Earnings: Plan Taking Shape Despite Tough Environment
-
JPMorgan Investor Day: CEO Dimon Pushes Against More Stock Buybacks at Current Prices