In the most recent fiscal year when Walmart had total revenue of $560 billion and a record $152 billion in fourth quarter revenue the Health & Wellness business had mid-single digit growth driven by pharmacy sales due primarily to branded drug inflation and mix.
Walmart’s plan to evolve into an omnichannel business is gaining momentum and the company plans to increase its aggressive even more in this direction. Walmart continues to build a new customer-centric business model and reposition to be in different businesses and exit some geographies to shift resources to priorities to create shared value for all stakeholders.
Health and wellness continues as a focus for the company as it has opened 20 Walmart health centers and with more in the pipeline. Walmart’s goal is to focus on delivering innovative solutions to increase access to affordable and convenient healthcare across its business.
Prior to opening its first health center, in Dallas, Georgia, in 2019, Walmart already had a presence in healthcare, delivering 420 million prescriptions a year, as well as operating numerous vision centers, and clinics in South Carolina, Georgia, and Texas that supply primary care, manage on-going conditions, hold physicals, and conduct lab tests.
With the opening of its health centers the company’s expansion into the health-and-wellness category is predicated on the same guiding principles that have long determined its approach in the retail industry. Walmart’s health care strategy has been based on price competition, following the EDLP (every-day low price)strategy that permeates throughout the organization.
Walmart’s opportunity in healthcare includes not only pharmacy, optical, hearing and OTC businesses, but also access through its thousands of locations and position as the country’s largest seller of food.
Walmart envisions an opportunity for a differentiated omnichannel healthcare business that helps customers through its ability to physically expand at its stores, leverage its experience with the social benefits of customers, and use the company’s growing digital capabilities.
Takeaway: Walmart has historically used its sizeable number of associates to test and launch its major health care initiatives