Walmart Abandons Health Clinics Foray as Costs Mount

Walmart (WMT) said Tuesday will close health centers it opened in five states and shutter its telehealth business, as expenses around building a network of low-cost health clinics increase.

The retailer said it is closing all 51 health centers it had first launched in 2019, although the company said it will continue to provide health and wellness services in its 4,600 pharmacies and more than 3,000 Vision Centers.

Walmart said in a statement that the business model for the clinics was “unsustainable.”

“This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” the retail giant said.

Walmart Launches Grocery Line to Capitalize on Inflation

Separately, the big-box retailer also said Tuesday it is launching a new grocery brand called BetterGoods, in its latest push to increase its in-house product lines as the disposable income squeeze created by inflation continues to hit consumers.

Most of the 300 products it will sell, which include pasta and chocolate, will be priced at under $5 each, the company said.

Consumers have been increasingly switching to cheaper private-label goods at low-priced chains in recent years amid elevated grocery prices. Walmart has been a beneficiary of that trend by launching in-house brands.

Walmart shares were down 1.46% at 1:35 p.m. Eastern Time.