What: Walmart is stopping short its venture in healthcare and that’s a surprise.

Why it is important: Health was seen as a new avenue for retailers post Covid. Not anymore: the avenue is not profitable enough.

Walmart has announced the closure of its 51 health centers across five states, alongside its virtual care services, citing lack of profitability as the primary reason. The decision stems from a challenging reimbursement environment and rising operational costs, which have rendered the healthcare venture unsustainable. Although no specific dates for the closures have been provided, Walmart is focused on ensuring continuity of care for its patients and is offering support to affected associates, including the option to transfer to other locations within Walmart or Sam’s Club. Associates will receive pay for 90 days post-closure, with severance benefits available thereafter if they have not transferred or left the company. Providers will continue serving patients until the clinics close and are also assured of 90 days' compensation, followed by transition payments.

Despite the closures, Walmart will maintain its health and wellness services, which include nearly 4,000 retail pharmacies and over 3,000 vision centers nationwide. The health centers, which offered a variety of services including primary care, dental, and optical services, were initially launched to compete with similar services by Amazon. The abrupt end to this initiative, especially after recent expansion announcements in Texas, highlights a shift in Walmart's strategic priorities towards more profitable ventures, even as it strives to manage the fallout for its employees and the communities previously served by the health centers.

Walmart Health Is Closing