Walmart will start delivering prescriptions to customers’ doorsteps. Customers can also get other items, such as groceries, shipped with their medications.
Provided by Walmart
as CVS and walgreens Closing hundreds of stores across the country to boost profits and investor sentiment, Walmart said Tuesday it is offering customers a new option: having prescription drugs delivered to their doorsteps.
The largest U.S. retailer said it now offers delivery services in six states: Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin. The company said in a news release that it expects to have prescriptions available in 49 states by the end of January. Walmart said it will not be able to provide prescription drug delivery in North Dakota due to state law.
The prescription drug delivery service is another example of Walmart trying to outdo its rivals in convenience and low prices. With the new service, customers can get multiple items in the same delivery, such as a box of tissues, a blanket or chicken noodle soup.
Walmart’s new delivery service could deal another blow to drugstore chains that are losing favor with consumers, a trend that has hit their profits and stock prices and forced them to rethink their strategies. Still, it’s unclear how much market share Walmart can win from CVS and Walgreens, both of which supply Same-day, one-day and two-day prescription delivery.
Walmart U.S. chief e-commerce officer Tom Ward said the company has added pharmacy delivery services due to demand from shoppers.
“This is actually the No. 1 service our customers ask for,” he said.
He said Walmart tested delivery services in several states and found customers were getting a variety of items, including prescription drugs, in a single delivery.
Walmart’s delivery service will be available for new prescriptions and refills, the company said. Delivery costs $9.95, which is Walmart’s standard price for home delivery, but is free for members of the company’s membership program, Walmart+.
The deal will work with health insurance plans, just like in stores, the company said.
The company said the deliveries will feature more security measures than other Walmart deliveries: Medications will be placed in tamper-evident packaging. Customers can track their order in real time through Walmart’s app or website and get a photo in the app or via email when their prescription is delivered. When customers order a new prescription and choose delivery, they are prompted to consult the pharmacy over the phone.
Walmart generates most of its annual U.S. revenue — nearly 60% — from groceries, but health and wellness is a growing category for the company, according to the retailer’s latest annual report for the fiscal year ended Jan. 31. 12% of annual revenue, which includes pharmacies, over-the-counter drugs and other medical products, ophthalmology services and other clinical services.
New challenges facing pharmacies
As of Monday’s close, Walmart’s stock price was up about 54% this year. Meanwhile, CVS shares are down about 26% this year, while Walgreens shares are down nearly 60%.
According to statistics, CVS is the largest pharmacy in the United States in terms of prescription drug revenue and will capture more than 25% of the market by 2023 Statista data release March. Walgreens trailed last year with nearly 15% share, while Walmart held just 5%.
CVS and Walgreens are grappling with declining prescription drug reimbursement rates. Inflation, weak consumer spending and competition from Amazon, big-box retailers and grocers have made it difficult for them to make a profit on the front of their stores, which sell items like cleaning supplies, beauty products and pantry staples.
CVS Chief Executive Karen Lynch left the company last week and was replaced by David Joyner as CVS faces pressure from Wall Street and, most recently, an activist investor to turn around its business. In addition to the leadership shake-up, CVS plans to cut $2 billion in spending over several years. That includes cutting less than 1% of the workforce, or about 2,900 jobs, across the company’s operations.
The company also completed a three-year plan to close 900 stores, with 851 stores closed as of August.
Walgreens is also cutting costs, announcing last week that it will close about 1,200 stores over the next three years, including 500 in fiscal 2025 alone. The chain has about 8,700 stores in the United States, a quarter of which it says are yet to make a profit.
Walmart faces its own financial challenges in health care. The discount store plans to bring its low-price strategy into health care by opening clinics that offer doctor, dentist and treatment appointments at lower prices.
This spring, however, Walmart closed all clinics, saying in a press release at the time that it was unable to operate a profitable business due to a “challenging reimbursement environment and rising operating costs.”
About The Author
