Food retailers are staking a bigger claim to the expanding pharmacy and wellness markets. By David FrederickAdvancing pharmacy operations and bolstering healthcare offerings are becoming an increasingly essential part of the grocery retail strategy. With health reform unleashing millions of newly insured pharmacy customers and public and private health plans demanding new and more cost-effective sources of front-line health care, the drive by food stores to expand pharmacy and wellness offerings continues to gain momentum.
Accelerating the trend is a growing shortage of primary care physicians. That makes the frontline care offered by supermarket pharmacies and in-store clinics that much more critical to patients and payers, as patient access to care—particularly the lower-cost care offered in the food-store setting—becomes an ever more serious issue to patients, health plans and plan payers.
A recent survey of 29 supermarket chains conducted by Food Marketing Institute (FMI) found “tremendous exploration and growth of health and wellness programs in the food retail setting,” with 96 percent of those chains reporting “that their companies are committed to expanding health and wellness programs in their stores.”
According to the FMI survey, “The cross section of retail and healthcare is fertile ground for both community service and business growth. Insurers are actively looking for alternatives to reduce costs and satisfy consumer preferences. At the same time, the majority of consumers are interested in receiving minor care beyond the doctor’s office. They are willing to receive advice on diet, nutrition, fitness, well-being, and even on managing a chronic condition.”
“In other words,” says report author Cathy Polley, vice president of health and wellness for FMI and executive director of the FMI Foundation, “we are seeing an unusual and ideal confluence of circumstances—healthcare environment, consumer interest and supermarket-solution-provider capabilities—for food retailers to define the business models that will build the future of retail healthcare.”
Grocery retailers are aligning with that convergence of forces by providing greater access to quality care and by leveraging their one-stop shopping advantages, their massive consumer drawing power and the natural synergies that exist between pharmacy-based health services and the benefits offered by good nutritional choices in the food aisles. Both those areas of the store mean health and wellness, disease prevention and disease management, and both give supermarket retailers the power to have a positive effect on customer care outcomes. It goes without saying that efforts in both pharmacy care and better nutrition also build brand loyalty and sales.
Becoming a health care destination
“Customers are looking for solutions and one-stop shopping. Our goal is to offer our customers traditional pharmacy services and the unique convenience grocery store pharmacies offer,” says James Hyland, vice president of investor relations, corporate communications and public affairs at Roundy’s Supermarkets. “In addition, we will continue to offer wellness solutions such as immunizations, blood pressure monitoring and nutritional supplements.”
Those efforts are expanding, Hyland adds. “Moving forward, we will expand our point-of-care testing and add biometric screenings in an effort to offer our customers a destination for fulfilling their wellness needs,” he says.
Pharmacy sales alone accounted for an average of 3.1 percent of total store sales across the entire grocery channel in 2014, according to research from FMI, with health and beauty care adding another three percent. For supermarket chains with a heavy presence in in-store pharmacies like Kroger, Albertsons/Safeway, Ahold USA, Publix Super Markets and H-E-B, pharmacy’s share of total sales can be double or even triple that industry-wide average, usually ranging from six to nine percent.
However, the growth of prescription revenues in the grocery setting is just the tip of a growing iceberg. Increasingly, in-store pharmacies are a driver and focal point for a broad push by supermarket and mass-merchant food retailers into a more comprehensive role in accessible health care, combining pharmacy care with nutrition to create a powerful health and wellness destination.
Now more than ever, grocery retailers are integrating consumer health and wellness initiatives as a major category of business. “The majority of food retailers view supermarket health and wellness programs as a significant business growth opportunity for the entire industry in the years ahead,” FMI reports.
Bolstering those efforts are the shifting attitudes of consumers themselves. New research from FMI points to growing consumer acceptance of the food store as a destination for health and wellness services and information, thanks to grocery retailers’ sustained efforts to improve both the clinical and preventive-care activities offered at their pharmacies, and the nutritional and healthy-eating choices and informational messages presented in the food aisles.
In 2014, nearly half of shoppers polled by FMI characterized their primary food store as an ally in their effort to get and stay healthy, with 45 percent of those surveyed saying their local grocery outlet was “working for me” in that effort.
Shoppers, in other words, are increasingly embracing the supermarket as a place to get and stay healthy, as well as the primary source for groceries. And food retailers are getting better all the time at exploiting the one-stop convenience offered at the food/drug combo store, and at tying together the patient-care services offered at the pharmacy and the health benefits they promote in other areas of the store like fresh produce, organics and natural foods.
“Supermarkets are indeed becoming a health care destination,” says Polley. “In addition to the fact that almost all stores have pharmacists on staff, a healthy 95 percent of stores employ dietitians at the corporate, regional and store levels.”
Polley adds that, “these dietitians and pharmacists are making noteworthy gains in working as a team to advance health and wellness,” with 67 percent of chains surveyed reporting that their pharmacists and nutritionists are “working together to develop programs and almost half are working together to make customer-specific recommendations.”
Equally significant, more than half of those chains say they are referring customers/patients to each other for counsel, the FMI survey notes.
A focal point
One clear sign of the industry’s growing focus on health and wellness is the steady increase in point-of-care testing and health screening services across the country. That expansion of health screening services within supermarket-based retail clinics and pharmacies is opening a new avenue for accessible low-cost care to millions of patients. Grocery retailers that operate pharmacy and clinic locations are helping ease the nation’s acute shortage of primary care physicians with unique quality care offerings.
Old lingering concerns among some physicians and health plan administrators about the quality of that care are fast disappearing as retail pharmacies partner with hospital and physician groups in continuity-of-care programs that provide post-discharge patients with medication therapy management, disease monitoring and other long-term, community-based care services at participating pharmacies. Demonstration projects around the U.S. have shown that the pharmacists providing those services are helping reduce re-hospitalization rates and improve patient outcomes.
For supermarkets and mass merchant retailers as well as drug stores, pharmacy practice has evolved to meet the needs of the new integrated model of care. According to the Accreditation Council for Pharmacy Education (ACPE), entry-level pharmacists possess knowledge of the “principles of clinical practice guidelines for various disease states and their interpretation in the clinical setting.” Pharmacists must also demonstrate an ability to operate point-of-care testing devices and run diagnostic tests in the diagnosis, staging, and monitoring of various disease states.
Pharmacy-based point-of-care testing used to involve just basic screenings for conditions like high blood pressure or elevated heart rate. But as food retailers push more aggressively into frontline care, more advanced screenings are rapidly becoming available, including tests to cover flu, strep, hepatitis C and HIV/AIDS, to name a few.
Among the leading proponents of increased testing services is San Antonio-based supermarket and pharmacy chain H-E-B, which has been offering an expanded list of health screenings since 2008. The chain promotes the service through its “Second Saturday” health screenings, available the second Saturday of every month at all of its 245 pharmacies. The screenings, says senior vice president-pharmacy Craig Norman, “have become a total store event,” with “healthy product demonstrations and other activities…to promote health and wellness.”
By opening or expanding the dialogue between patients and pharmacists or in-store clinicians, health screenings yield other benefits, as well. At a Giant Food supermarket in Baltimore, for example, a study found significant improvements in medication adherence, exercise levels and knowledge of hypertension among customers who completed a three-week blood pressure education program led by the University of Maryland School of Pharmacy.
Customers who signed up for the two 1.5-hour sessions began with a health and blood pressure screening by a pharmacist or student pharmacist. During the sessions, a pharmacist and the store’s dietitian teamed up to deliver the message that appropriate medication therapy combined with diet and exercise could lower heart risk. Giant dubbed the program “Caring for your Sweetheart,” playing on the cardiovascular benefits of improving blood pressure control.
The clinician will see you now
In-store health clinics are another way that supermarket retailers are able to strengthen quality care options and lead traffic to the pharmacy department. According to FMI, “there has been significant growth in the number of retailers that established in-store clinics in 2014. Combined with in-store pharmacies, these locations are perhaps the most tangible demonstration to customers that supermarkets not only offer health and wellness education and support, but are convenient and affordable healthcare providers.”
Walmart staked a claim to a more aggressive role last year with the opening of its first Walmart Care Clinics, after nearly a decade of leasing store space to local outside clinic providers. Walmart’s new, company-owned in-store clinics offer comprehensive medical care aimed at replicating many of the services offered by physician-run primary care centers, at steeply discounted prices that could spell trouble for competitors if the concept rolls nationwide.
For employees and dependents with Walmart health care plans, visits cost just $4, and walk-in visits for nonemployees will cost $40.
Kroger has also accelerated development of its in-store clinic offering, opening 55 new walk-in care centers under The Little Clinic banner in 2014. That boosted Kroger’s total clinic count to more than 165 centers in select Kroger, Fry’s, JayC and King Soopers stores in Ohio, Georgia, Kentucky, Tennessee, Arizona, Indiana, Virginia, Colorado and Mississippi.
The food and pharmacy giant also bolstered its business last August when it completed its $280 million acquisition of online vitamin and supplement seller Vitacost.com.