Walmart Health didn’t test the opportunity in rural underserved markets

What lessons can be drawn from Walmart’s precipitous shut down of its attempt to launch primary care, dental and behavioral health services?  The Walmart Health management team (after some mid-stream ‘dialing in’) was composed of savvy healthcare insiders; the team could tap into learnings from Walmart’s four prior attempts to launch clinics inside supercenters; and Walmart invested quite a bit of money in the effort. Collectively, however, these assets were not enough for success.

We think Walmart Health’s key mistake was to target markets with high disposable income, which, unfortunately for the strategy, were also markets with relatively saturated care supply. The value proposition of convenient access situated behind the groceries, paper towels and kitchen utensils was insufficiently compelling when more traditional (and trusted) care delivery models were available nearby. An apparent final tweak in strategy towards going in-network with health plans and focusing on markets with denser populations came too little too late.

Walmart has plenty of stores in rural markets desperately underserved with health care resources.  Walmart could have launched in any of those and, while perhaps not making a lot of money, would likely have ramped up visits-per-day faster, created a more sustainable business and, perhaps, constructed a platform for a national model.  That strategy is yet to be tested and we hope some other geographically distributed, foot-traffic-intensive business will consider it.

Our analysis is detailed in this report: (PDF) Walmart Health didn’t test the opportunity in rural underserved markets


Harry Sultan

Associate Consultant

Tory Wolff

Managing Partner

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