Walmart, the largest global retailer, announced the closure of its healthcare facilities, a network it had intended to expand just last year.

In a blog post, the company stated that its 51 health centres across five states would cease operations. These centres were situated adjacent to Supercenter locations. However, this decision will not impact the numerous pharmacies and vision centres within Walmart stores, totaling over 4,600 and 3,000 respectively.

The inception of Walmart's health clinic initiative dates back to 2019 in Dallas, Ga., offering primary care, lab services, X-rays, EKGs, counselling, as well as dental, optical, and hearing care. Many of these facilities were strategically placed in smaller towns where access to quality healthcare might be limited, with the company emphasising affordability. Additionally, in 2021, Walmart introduced a virtual healthcare option through the acquisition of MeMD, a telehealth provider.

Explaining the decision, Walmart cited the challenging reimbursement landscape and rising operational expenses, making the healthcare business unsustainable at present. The company has yet to finalise the closure dates for each centre, which are spread across Georgia, Arkansas, Florida, Illinois, and Texas.

Affected employees will receive compensation for 90 days and will have the opportunity to transfer to other Walmart or Sam's Club locations.

David Silverman, a retail analyst at Fitch Ratings, highlighted the complexities of venturing into healthcare, contrasting it with the comparatively straightforward nature of retailing consumer goods like laundry detergent and automotive parts.

Interestingly, in March 2023, Walmart announced plans to double its health centre presence, aiming for over 75 Walmart Health Centers by the end of 2024, with expansions into states such as Missouri and Arizona. This move comes amidst significant shifts in the healthcare landscape, exemplified by the dissolution of the high-profile joint healthcare venture between Amazon, Berkshire Hathaway, and JPMorgan Chase in 2021, as well as Walgreens' closure of 140 VillageMD clinics in March, with an additional 20 slated for closure.