Walmart will begin delivering prescriptions to customers' doorsteps. Customers can also get additional items with medications, such as groceries.
Courtesy of Walmart
like CVS and Walgreens Hundreds of stores closed across the country to support profits and investor sentiment, Walmart It said Tuesday it is offering a new option for customers: having prescriptions delivered to their doorstep.
The nation's largest retailer said deliveries are now available in six states: Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin. The company said in a press release that it expects to offer prescriptions in 49 states by the end of January. Walmart said prescription delivery will not be available in North Dakota due to state laws.
The prescription delivery service is another example of how Walmart is trying to outdo competitors in terms of convenience along with lower prices. With the new service, customers can get a mix of items delivered during the same delivery, such as a box of tissues, a blanket or chicken soup.
Walmart's new delivery offering could be another blow to drugstore chains, which have fallen out of favor with consumers in a trend that has hurt their profits and stock prices and forced them to reconsider their strategies. However, it's unclear how much market share Walmart can win from CVS and Walgreens, both of which offer same-day, one-day and two-day prescription delivery.
Tom Ward, chief e-commerce officer at Walmart US, said the company added pharmacy delivery because of shopper demand.
“This is actually the number one service our customers request,” he said.
Walmart tested deliveries in several states and saw that customers benefited from getting a mix of items, including a prescription, in one delivery, he said.
Walmart's delivery service will be available for prescriptions and new refills, the company said. Delivery will cost $9.95, the standard price for Walmart door deliveries, but will be free for members of Walmart+, the company's membership program.
Health insurance plans will apply to the deal, as is the case with the store, the company said.
The company said the deliveries will come with a few more security steps than Walmart's other deliveries: The medications will be placed in tamper-evident packaging. Customers can track orders in real time through the Walmart app or website and get a photo in the app or via email when the prescription is delivered. When a customer orders a new prescription and chooses delivery, he or she is asked to make a consultation with the pharmacy over the phone.
Most of Walmart's annual U.S. revenue — nearly 60% — comes from groceries, but health and wellness is a growing category for the company, according to the retailer's latest annual filing for the fiscal year ending Jan. 31. It represents about 12% of its annual revenue in the United States. It includes pharmacy, over-the-counter medications and other medical products, optical services and other clinical services.
A new challenge for pharmacies
As of Monday's close, Walmart shares were up about 54% for the year. Meanwhile, CVS shares are down nearly 26% so far this year, while Walgreens shares are down nearly 60%.
CVS is the largest U.S. pharmacy by prescription drug revenue, with more than 25% market share in 2023, according to Statista data released in March. Walgreens trailed with about 15% of that share last year, while Walmart had just 5% of that share.
CVS and Walgreens are grappling with low prescription drug reimbursement rates. Inflation, weak consumer spending and competition from Amazon, big-box retailers and grocery stores make it difficult for them to make a profit in the front of the store, which carries cleaning supplies, beauty products and food staples, among other items.
CVS CEO Karen Lynch left the company and was replaced by David Joyner last week, as CVS faces pressure from Wall Street and, more recently, an activist investor to turn around its business. On top of the leadership change, CVS plans to cut expenses by $2 billion over several years. This includes cutting less than 1% of its workforce, or approximately 2,900 jobs, in the corporate side of its business.
The company is also wrapping up a three-year plan to close 900 of its stores, with 851 locations closed as of August.
Walgreens is also cutting costs, announcing last week that it will close nearly 1,200 stores over the next three years, including 500 in fiscal 2025 alone. The chain has about 8,700 locations in the United States, a quarter of which it says are unprofitable.
Walmart has faced its own financial challenges on the health care side of the business. The discount company planned to put its low-price spin on health care by opening clinics that offered doctor and dentist appointments and treatment at a lower cost.
However, in the spring, Walmart closed all of the clinics, saying in a press release at the time that it could not operate a profitable business due to the “challenging reimbursement environment and escalating operating costs.”
