SOURCE: Kalorama Information

Kalorama Information

November 11, 2011 14:33 ET

In-Store Medical Clinics Could Be Viable for Walmart and Other Retailers, If Handled Right

NEW YORK, NY--(Marketwire - Nov 11, 2011) - In-store medical clinics represent a viable business for retailers who locate and manage them correctly, according to Kalorama Information. The healthcare market research publisher makes its assessment given the recent news that the largest U.S. mass retailer Walmart may dramatically expand its retail clinics offering. Kalorama has completed three studies on the nascent industry over the past five years and estimates in-store medical clinic sales at $733.4 million.

"While medical clinics locations are still relatively few in the U.S., the concept survived the recession and legislative challenges," Bruce Carlson, publisher of Kalorama Information, said. "We've always felt our forecasts could be dramatically changed if a major retailer jumped in, and recent news suggests that may happen."

Several years ago, Walmart had announced as many as 400 medical clinics in its stores, but then had to close some locations. Today their website lists approximately 140 "Clinic at Walmart" locations, which is just a fraction of all US stores. Yet this could change soon, as Walmart sent out a request-for-information document to strategic partners, which was obtained by media sources. This document indicated that Walmart planned to offer primary care services to its customers and sought a partner to help do that. Further statements indicate that the retailer intends to take advantage of healthcare reform and the possibility of millions of newly insured. According to Kalorama, the retailer could benefit from tying new clinics into the store rather than keeping them as independent entities outside the main traffic zone.

"They can't be seen the same as a travel agency, optometrist or Subway sandwich shop," Carlson said. "Our research has found that retail clinics work best when connected to pharmacies, when supported by store management and when their success or failure is measured on indirect as well as direct revenue."

Kalorama notes the success of retail clinics in pharmacies versus other locations. The two strongest retail clinic chains mirror the two strongest drug store chains, CVS and Walgreens. CVS's MinuteClinic grew from 541 stores in 2009 to over 560 in 2011. With fewer stores but faster growth, Walgreens has also embraced the concept; its Take Care Clinics have gone from 250 to approximately 330 in two years' time. Kalorama's study indicated that mass outlets like Walmart or Costco could gain at least $800 per day from indirect revenues -- extra purchases made by customers who came to the store to receive primary care services.

Kalorama Information's April 2011 report on the retail clinic industry, "Retail Clinics 2011: Market Assessment, Supplier Sales, Key Players and Trends," contains a breakout of stores by type, profiles of clinic companies, and estimates sales of suppliers to clinics in the coming years.

About Kalorama Information
Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog.

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