It should come as no surprise that the landscape of the retail sector has been changing over the last several years. Technology and online shopping platforms have been pushing retailers to either close their physical commercial real estate (CRE) space or reinvent their offerings. Consumers are looking for speed of service, lower costs, and convenience. And that consumer mentality is spilling into other industries, including healthcare. Recently, a few companies with a focus on both health and retail are making adjustments to stay relevant in the evolving consumer mindset. Drugstores, clinics, and CRE are changing in concept, design, and number.
Walmart Opens A New Type of Health Facility
Retail giant Walmart already offers in-store pharmacies, 19 clinics, and vision services. Walmart also sells over-the-counter medications and basic medical supplies. As of the end of their 2019 fiscal year, Walmart netted $35.79 billion in healthcare-related sales. And now it is setting its sights a little higher.
In 2019, Walmart took a bold step forward in the healthcare sector. The company opened its first clinic that will house a wide array of medical services under one roof. Primary care, dental care, counseling, EKG testing, and several other health services will be available in one location. The first, and currently the only, new Walmart Health service fills 10,000 square feet of its Dallas, Georgia location. In comparison, the other, more basic Walmart Care Clinics are only 1,500 square feet. With online sales on the rise, Walmart’s brick and mortar footprint needed a change, and they may have found their new concept to fill it. As for now, there is one other Walmart Health planned for Calhoun, GA, but Walmart has not yet announced a national plan.
Walgreens to Close Clinics and Partner with Jenny Craig
Surprisingly, while other drugstores are announcing expansions and new health offerings, Walgreens has recently announced the closure of about 40% (150) of their in-store clinics. Walgreens’ focus is shifting, testing primary care clinics that offer a higher level of care. The company is also partnering with Jenny Craig to offer weight loss programs in 100 of their stores. This is a unique step for the well-known drugstore retailer and a new way to diversify their reputation as an overall health entity.
CVS Opens HealthHUB Concept Stores
About this time last year, CVS and Aetna closed their merger. This was a $70 billion deal for CVS, whose goal was to localize care for patients and to lower costs. Along with the closing of the merger, CVS had planned to open a new store concept, and they followed through.
Earlier this year, CVS opened three stores in Houston under a brand-new, health-focused concept. Not only did the company expand their clinics, but they added a lab, wellness rooms, dieticians, and respiratory specialists. There are also less general goods and more health-related items, such as medical supplies for diabetes and asthma.
To connect to the customer’s online shopping tendencies, in-store customers can also speak with the dietician about the online weight-loss platform, Noom. These new stores relate to the customer on a health and overall lifestyle level. They are no longer just a retailer drugstore, but an experience-based HealthHub.
The Effect of Drugstore Clinics on CRE
Drugstore retailers like these are taking actions to adjust to the range of consumer-patient needs. New partnerships, ranges of health programs, and customer convenience seem to be at the top of their lists. These shifts in business models are proof that there is both a thriving value and need for local clinics. Proximity to patients and affordable programs that can meet a variety of individual needs is going to take precedence over larger, more costly health facilities. While the standard brick-and-mortar retail sector is in danger of closing up shop, these stores are creating new concepts that expand their square footage. Drugstores, clinics, and commercial real estate will go hand-in-hand as they make plans for the future of healthcare.
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected] or call 615-564-4133.
