Walmart is closing all 51 of its health centers, the retailer announced April 30. It will also shut down its virtual health care operations.

“There is not a sustainable business model for us to continue,” Walmart said in a press release. “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.”

Walmart will continue operating nearly 4,600 pharmacies and more than 3,000 vision centers, it said. Employees who work at health centers are eligible to transfer to another Sam’s Club or Walmart location or receive severance.

The retailer said it doesn’t have specific closure dates set for each center yet.

Walmart is No. 2 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales. It is also No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of top online marketplaces by third-party gross merchandise value (GMV).

Walmart’s history with health centers

The mass merchant opened the first Walmart Health Center in Georgia in 2019. The first center offered primary care, labs, X-rays, EKGs, and other health services “at low, transparent pricing, regardless of customers’ insurance status,” Walmart said at the time.

A second location opened in 2020, and in 2021, Walmart ventured into telehealth too. It eventually reached 51 locations across five states: Arkansas, Florida, Georgia, Illinois and Texas.

As recently as March 2023, Walmart planned to continue expanding its health care footprint. At the time, it announced plans to open an additional 28 health centers in 2024, for a total of 79 U.S. locations. The new locations were planned for Texas, Arizona, and Missouri.

In that announcement, Walmart also noted some changes to the layout of Walmart Health Centers going forward. The retailer said it was changing the physical footprint of the centers to allow patients to spend less time in waiting rooms, and integrating more modern technology.

Other retailers enter health care

While Walmart pulled back its health care investments, other major retailers are stepping further into the space. 

Costco partnered with Sesame, an online health care marketplace targeting consumers with no insurance or high-deductible plans. The marketplace is also available to people who aren’t Costco members, although at a higher rate. 

Customers can access primary care, dermatology, mental health services, and other specialties through the virtual health service. In April, Costco expanded the relationship to offer prescription weight-loss drugs including Ozempic and Wegovy.

“The No. 1 search term of Costco members seeking primary care on Sesame was around weight loss,” Sesame co-founder and CEO David Goldhill said.

Costco members can pay $179 for a three-month weight-loss program including video consults, nutritional guidance and a treatment plan, with extra charges for weight-loss medications.

Amazon is also growing its health care presence with weight-loss drugs. In March, Amazon announced it would carry Eli Lilly medications through its Amazon Pharmacy storefront. Amazon delivers the prescriptions through a deal with LillyDirect, the pharmaceutical company’s direct-to-consumer arm.

Amazon first launched its online pharmacy in 2020. That was two years after the retailer spent $753 million to acquire online pharmacy PillPack.

In 2023, Amazon delved further into health care by completing its $3.49 billion acquisition of primary care provider One Medical. It currently offers telehealth appointments for 41 conditions through Amazon Clinic.

Costco ranks No. 7 in the Top 1000, and Amazon ranks No. 1. Amazon also ranks No. 3 in the online marketplaces database.

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