Grocery Stores Find Success With In-Store Health Clinics

Many retail businesses have tried their hand at healthcare: the likes of Rite Aid and Walgreens scaling back their so-called medtail efforts. The fee-for-service makes it harder than it looks because the cost of primary care doesn’t get cheaper with scale.

Groceries seem to have made progress with pharmacies, as Placer.ai has pointed out, and many have managed this for years. However, recently groceries have moved towards more extensive clinics. Kroger runs its Little Clinics, first introduced in 2003, in more than 225 Kroger stores. There are additional locations in regional brands Dillons, Jay C Food Stores, Fry’s, and King Soopers.

Placer.ai, which uses cell phone information to pinpoint the movement of people down to the property level, looked at the effects of a clinic in a grocery store on foot traffic, repeat business, and their customers’ demographics.

The eight Dillons locations had 93% more visits than average for the chain in the first half of 2024. Similarly, Jay C saw visits in its two locations with clinics do better by 92.9% than the average for the brand.

Kroger stores with clinics did 43% better, while Fry’s with clinics improved19.2%. For King Soopers, the improvement was 16.5%. And for H-E-B, it was 14.5%.

At least some of the chains have found a significant increase in visits from affluent people in the respective areas. The median household incomes of the King Soopers stores with clinics were $92,300 in the first half of this year. That is far higher than the overall average of $88,100. This is likely why some of the chains — King Soopers, H-E-B, and Jay C — start with stores in areas that have higher median household incomes.

For these three chains, stores with clinics attracted visitors from captured markets with even higher median household incomes. The other brands — including Fry’s, Kroger, and Dillons — put clinics in stores with household incomes that were slightly below chain-side averages. But even there, it tends to be the more affluent consumers that visit.

In general, the stores with clinics also draw in families, particularly with services like physicals, nutritional plans, and vaccinations. “The convenience of being able to take care of healthcare, grocery shopping, and pharmacy needs all in one go makes these stores particularly attractive to parents,” Placer.ai wrote. “And this jump in foot traffic shows the strategic advantage of incorporating healthcare services into the retail environment.”