Walmart, the world’s largest retailer, said Tuesday that it was shutting down its health care centers, a network that only last year it said it planned to expand.
The retailer said in a blog post that its 51 health centers across five states would close. The centers were next to Supercenter locations. The plans won’t affect the more than 4,600 pharmacies and more than 3,000 vision centers within Walmart stores.
Walmart started the health clinic initiative in 2019 in Dallas, Ga., with centers providing primary care, labs, X-rays and electrocardiograms, counseling, and dental, optical and hearing services. Many were in smaller towns where customers might lack access to quality care, and the company had said it was focused on affordability. In 2021, Walmart started offering a virtual option when it acquired MeMD, a telehealth provider.
“This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” the company said Tuesday.
Walmart said it was still deciding when it would close each center. In addition to Georgia, centers are in Arkansas, Florida, Illinois and Texas.
Workers within the centers will be paid for 90 days and will be eligible to transfer to other Walmart or Sam’s Club locations, the company said.
Offering health care is more difficult than selling consumer goods like laundry detergent and car parts, said David Silverman, a retail analyst at Fitch Ratings, noting the layers of government and insurance providers involved.
“The attempts to enter these spaces and some of the failures of doing so really underscore the challenges and complexities of operating in the U.S. health care space,” Mr. Silverman said.
In March 2023, Walmart said it planned to double its health center locations. It said that by the end of 2024, it expected to have more than 75 Walmart Health Centers and expand to states like Missouri and Arizona.
In 2021, Amazon, Berkshire Hathaway and JPMorgan Chase ended their high-profile joint health care venture, which sought to explore new ways to deliver health care to their employees. In March, Walgreens said it had closed 140 of its VillageMD clinics and planned to close 20 more.