It wasn’t too long ago that in-store medical clinics were considered an important component in the supermarket portfolio of wellness services. With pharmacies in many stores, adding a clinic — staffed by a nurse practitioner or physician’s assistant — seemed like an ideal complement.
The logic went like this: Customers could get treated for their problem, get prescriptions filled or purchase OTC remedies in the pharmacy, and then (hopefully) take a few extra minutes to hit the food section of the store so that they could buy oranges for that cold, or herbal tea to fight the sniffles, or ice cream to relieve a sore throat.
Kroger in particular saw real potential in clinics in 2008 when it took a minority interest in The Little Clinic, based in Nashville, Tenn. At the time, the latter company operated 26 locations inside Kroger-owned stores throughout the country, as well as some 35 locations in Publix stores in Florida and Georgia.
Then in February 2010, Kroger plunked down $86 million to acquire full ownership of the clinics that were located in its stores, and then only two months later, promptly shut down 20 of those units with the goal of “strengthening this business model.”
This week brought news that Publix has decided to shutter the 40 Little Clinics it had operating in stores. These particular clinics were operated through an agreement with Solera Capital, the New York-based investment fund that retained the clinics as part of the deal it made when it sold out to Kroger.
The question here is, What’s wrong with the supermarket in-store clinic model? Clinics seem to be faring much better in the drug channel, where the big players — Walgreens and CVS — offer clinic services. Is it a matter of perception? Are clinics more closely associated in consumers’ minds with drug stores than with supermarkets? Given the poor track record in foods stores, as evidenced by the closures, it would seem so.
There’s another potential cause, but this one carries a bit more optimism. Companies might have a tough time attempting to alter preconceived consumer notions of the role of clinics in supermarkets, but that’s not the real issue. The true insight here is that many retailer wellness programs have shifted to emphasize prevention. Let’s say it again: Prevention.
Take a look around any supermarket today and you’ll find nutrition labeling, health fairs, dietitian services… the common link connecting all of these elements is that they are designed to keep people from becoming obese, or getting diabetes or becoming ill.
If that is indeed the shopper perception of their favorite supermarket, then of course they’re not going to want to go in there sick to visit a clinic. They might go to the pharmacy to fill a prescription, but the rest of the store shouts Health!
Retailers might worry about losing their representation in the clinic business, but they’re ignoring the commanding lead they enjoy in keeping their customers from getting sick in the first place.