BENTONVILLE, Ark. — In a move that may signal the entry of large health care entities into the in-store clinic business in a big way, Wal-Mart Stores plans to open 400 co-branded clinics by 2010.
Using the name “The Clinic at Wal-Mart,” the retailer said this month it would affiliate with a hospital system or an operator closely aligned with a hospital system to run each clinic. This move may trickle down to other retailers, as smaller clinic operators may be hurt, observers said.
“Wal-Mart's strategy indicates that independent clinic operators will likely lose out to the deep-pocketed retailers in the retail clinic race,” Deborah Weinswig, retailing/broadlines, food and drug, and home improvement analyst at Citi Investment Research, New York, told SN. “We believe CVS/pharmacy will dominate, with Walgreens and Wal-Mart as the second and third players.”
The announcement was made shortly after a small-company in-store clinic operator, CheckUps, New York, shuttered 23 clinics operating in Wal-Mart stores.
Wal-Mart said it will not be closing its existing clinics, which are run in partnership with a variety of clinic operators, including Aurora Health Care, Milwaukee; Solantic, Jacksonville, Fla.; Quick Health, Burlingame, Calif.; and others. However, the first co-branded clinics, which are set to open in April in Little Rock, Ark., Atlanta and Dallas, will be run in cooperation with local hospitals.
Wal-Mart has also signed a letter of intent to work with RediClinic, Houston, and local hospital systems to open co-branded clinics in 200 Wal-Mart Supercenters, and with St. Vincent Health System, Little Rock, to open four co-branded clinics.
“Previously, Wal-Mart worked with many different clinic operators, essentially leasing space to them, with little input on the look and experience of the clinics,” Weinswig said. The Clinic at Wal-Mart units will offer a limited set of affordably priced “Get Well” and “Stay Well” services, the retailer said. Each clinic will operate seven days a week and feature a consistent, innovative design.
“With the co-branding strategy, Wal-Mart now will be able to standardize the layout and experience of the clinics, giving patients more confidence in the services offered. Also, by working exclusively with hospitals or medical groups, Wal-Mart should benefit from the added legitimacy of its clinics. Hospital systems have strong brands that consumers trust,” Weinswig said.
The retailer is also giving operators a turnkey solution: offering a 500-square-foot clinic with major brand visibility. “The operator will not have to negotiate for space or location, deal with building permits, contractors or suppliers. Meanwhile, Wal-Mart can standardize the clinic experience no matter what store patients visit,” Weinswig wrote in a research note.
The new clinics will have uniform price transparency with signage featuring charges that will typically run between $40 and $65.