Wal-Mart taking on Target in yet another category
Wal-Mart (NYSE: WMT) on Tuesday announced a series of initiatives to beef up its health and wellness offerings, at a time when low-price competitor Target (NYSE: TGT) also has the segment in its crosshairs.
On Saturday, the world's largest retailer will host what it's dubbed "America's Biggest Health Fair," at which it will provide free glucose, blood pressure and vision screenings at more than 4,400 of its U.S. stores.
The retailer will also offer shoppers commonly needed seasonal immunizations, including the flu shot, for a fee.
Separately, Wal-Mart announced that it will once again partner with DirectHealth.com, to help customers select and enroll in Medicare and public exchange programs from Oct. 15 through Jan. 31. In the past, Wal-Mart shoppers could only enroll in public exchange programs online and over the phone.
And in November, roughly one year after launching its own health clinics, the retailer will open its 18th clinic, in Royse City, Texas.
"We will simplify for our customers making access to health care easy and affordable," said Michelle Gloeckler, executive vice president of health and wellness and consumables for Wal-Mart U.S.
Gloeckler said Wal-Mart's decision to focus on health care is the result of consumers' desire to lead healthy lifestyles, though she said it should also drive traffic to stores. Pharmacy shoppers tend to be valuable customers, as they often make frequent trips to pick up their prescriptions.
The push also comes as competitor Target is making a play in the health and wellness category. Earlier this year, the bull's-eye retailer sold its pharmacy business to CVS Health (NYSE: CVS), which analysts said could result in millions of repeat customers.
Moody's analyst Charles O'Shea said that while retailers tend to benefit from pharmacy shoppers' "sticky" behavior, it's tough to get someone to switch their prescription to a new place unless they relocate.
Traditional pharmacies also have an advantage in terms of the ease with which consumers can pick up their prescriptions.
"One of the things that I pay attention to on the pharmacy side is convenience," O'Shea said. "It's just easier with drive-thru pharmacies. There's just such a convenience and comfort factor."
On Wal-Mart's most recent earnings call, U.S. chief Greg Foran said a lower-than-expected pharmacy reimbursements dented the company's gross margin. Still, the health and wellness category benefited from growth in prescriptions.
Health and wellness accounted for 11 percent of Wal-Mart's U.S. business last year, second to grocery.
In addition to health and wellness, Target and Wal-Mart are both working to improve their food and baby businesses .
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