Kroger Buys Stake in Clinics

MARK HAMSTRA

CINCINNATI — Kroger Co. here has taken a page from the drug store game plan by investing in The Little Clinic, an operator of walk-in medical facilities with about 61 outlets in supermarkets operated by Kroger and Publix Super Markets.

Kroger's minority investment in The Little Clinic will support “a substantial clinic rollout,” the companies said. The Little Clinic, based in Nashville, Tenn., currently operates 26 locations in Kroger-owned stores throughout the country and has about 35 locations in Publix stores in Florida and Georgia, according to its website. The clinics are staffed with nurse practitioners and physician's assistants who are authorized to diagnose, treat and write prescriptions for many common illnesses and minor injuries.

Other retailers, including Wal-Mart Stores, Bentonville, Ark., and CVS, Woonsocket, R.I., have invested in clinic operators. CVS' MinuteClinic, in fact, operates in some Kroger-owned supermarket locations.

Both Kroger and The Little Clinic declined to discuss the details of Kroger's investment. New York-based Solera Capital and a group of individual investors together continue to own a majority interest in The Little Clinic, according to a spokesman for the private investment firm.

Plans call for The Little Clinic “to grow with its current partners,” the spokesman told SN. He said he did not have information about how Kroger's investment might impact future development in Publix stores. Publix told SN it has an ongoing relationship with The Little Clinic.

Solera, founded in 1999 by Molly Ashby, also owns Annie's Homegrown, a Napa, Calif.-based producer of natural and organic food products.

Andrew Wolf, an analyst with BB&T Capital Markets, Richmond, Va., said Kroger and other retailers are betting that in-store clinics will play an increasingly important role in providing health care in the U.S.

“Even though they are costly and don't necessarily have enough business right now, the industry is banking on them to be a big part of health care going forward,” he said. “There's a belief out there in the health care arena that payers and insurance providers will mandate proactive programs that include things like screening and compliance, and that these kinds of clinics can play a role in that.

“I think Kroger is joining the major drug store chains and Wal-Mart and saying, ‘Hey, we are going to be a part of that future.’”