Kroger, a distinguished grocery chain with over 2,700 shops within the U.S., is following the lead of its prime rivals by lowering an important a part of its enterprise amid current headwinds, impacting a number of places.
In 2017, Kroger took a daring step into the well being care business by launching Kroger Well being, which affords buyers entry to a variety of in-store and on-line well being and wellness providers, comparable to prescription filling, dietitian consultations and vaccinations.
Kroger’s well being division lately noticed a spike in shopper demand. Throughout the third quarter of 2025, the grocery chain’s equivalent gross sales (excluding gas) elevated by 2.6% yr over yr, in line with its most up-to-date earnings report. Kroger famous that robust gross sales in its pharmacy division throughout the quarter have been a key driver of equivalent gross sales progress.
“Our pharmacy business delivered another strong quarter fueled by growth in both core pharmacy scripts and GLP-1s,” mentioned Kroger interim CEO Ron Sargent, throughout an earnings name in December. “While the strong growth in pharmacy sales impacts our margin rate, it contributes positive gross profit dollar growth and supports our overall operating profit.”
Kroger is scaling again a key in-store service throughout choose places.
Jonathan Weiss/Shutterstock
Kroger cuts again a serious service for buyers
Regardless of elevated demand for well being providers, Kroger has determined to reduce operations of its walk-in medical clinic, The Little Clinic, which is positioned inside its Kroger, Jay C, King Soopers, Fry’s and Dillons shops.
In Georgia, Kroger is shuttering all 18 Little Clinic places, a transfer that may take impact on April 4. At present, Kroger has over 220 Little Clinic places in its shops throughout a number of states. The corporate didn’t present a motive for closing these places in Georgia.
“We have enjoyed serving the Georgia community for the last several years through our clinics,” mentioned a Kroger spokesperson in a press release to Retail Dive. “We invite our valued patients to continue using the pharmacies conveniently located in Kroger stores.”
The transfer from Kroger comes amid a time when its CEO is making daring cost-cutting choices, together with layoffs and retailer and automatic success middle closures, to maintain grocery costs low.
Associated: Kroger CEO has a harsh resolution to rising costs in shops
This isn’t the primary main lower Kroger made to its well being enterprise. In 2024, it bought its Kroger Specialty Pharmacy enterprise, which supplied pharmacy providers to people with complicated and continual diseases, to Evelance Well being’s CarelonRx for $464 million.
The closings of Kroger’s Little Clinic places in Georgia observe within the footsteps of some of its prime rivals.
For instance, in 2024, Walmart shut down all 51 of its in-store well being clinics and its digital care providers, citing greater prices and a “challenging reimbursement environment.”
“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,” mentioned Walmart in a press launch in 2024.
That very same yr, Walgreens additionally determined to speed up closures of its in-store VillageMD clinics after it misplaced practically $6 billion from the enterprise throughout the second quarter of that yr. CVS has additionally been aggressively shuttering dozens of its in-store MinuteClinics at a number of places throughout a number of states.
Why retailers are closing their well being clinics
When this development first took off, Timothy Hoff, professor of administration well being care methods at Northeastern College, mentioned in an interview with Northeastern World Information in 2024 that retailers are dealing with challenges of their well being clinic companies as a result of they expanded “too quickly.”
“It’s the classic story of expanding too quickly and realizing the business model doesn’t necessarily work for that kind of growth,” mentioned Hoff. “Primary care is a very low-margin business. The reimbursements are low. You’re not going to make a lot on each transaction.”
He mentioned many retailers underestimated the impression inflation had on medical prices, which additionally contributed to closures.
Extra Retail:
- Lowe’s rolls out free affords for patrons amid challenges
- Lululemon struggles to reverse regarding buyer conduct
- Kroger provides beneficiant provide for patrons as grocery costs rise
“Expanding too quickly, without understanding your cost structure, is problematic,” he mentioned. “A lot of companies expanded without realizing how much inflation over the last four to five years really affected the price of medical supplies and a lot of the fixed overhead.”
Moreover, Hoff flagged that these retailers confronted rising prices to lease or buy area for his or her well being clinics and have been battling employee shortages.
“Workforce shortages meant they couldn’t staff these places adequately or had to pay staff more,” he mentioned.
The current closures of retail well being clinics additionally come after a 2024 survey from the Main Care Collaborative discovered {that a} low proportion of People want retail clinics for well being care.
The place People want to go for well being care providers:
- Roughly 73% of People want to hunt well being care providers from Main care practices.
- Additionally, 12% flip to pressing care or walk-in clinics for these providers.
- About 5% of People want retail clinics.
- Solely 4% want to go to emergency departments.
Supply: Main Care Collaborative
In an interview with MedCity Information in 2024, Neal Batra, principal and well being care chief at Deloitte Consulting, mentioned that retailers want to vary their strategy to offering well being care providers to their clients by specializing in gaining belief.
“The future of retail health is truly poised for transformation, but it won’t be fully realized unless there is a strategic shift in design and approach that is centered around engaging consumers before they are sick,” mentioned Batra. “When you consider what hasn’t worked with retail health, I believe it’s because they’re chasing after the same dollar, or consumer, that is already engaged with incumbent health care providers for traditional sick care.”
Associated: Kroger provides beneficiant provide for patrons as grocery costs rise
