Walmart on Tuesday announced that it would shutter its health clinic business.

The US’s largest retailer currently operates 51 in-person health clinics and a virtual health care operation, however it has said that it does not see the division as a sustainable business model to continue.

In a statement, Walmart said that high operating costs and a lack of profitability made health care "unsustainable for us at this time."

In comments to Reuters, a spokesperson added: "Healthcare is expensive to run. We were finding that the increased labour and operating costs environment, like with reimbursement, both public and private, made it difficult (to run the business) and obvious we had to close.”

The decision represents a complete strategic shift for the company’s approach to healthcare. Walmart in early 2024 announced plans to nearly double its number of health clinics, with its senior vice president of healthcare delivery David Carmouche stating that the company had a unique position to create a "one-stop model of healthcare".

On Tuesday, Carmouche wrote on LinkedIn that "though it didn't end where I had hoped it would...there will be a time in the future to think about and discuss the challenges specific to retail healthcare."

Walmart will now shift its focus to 3,000 in-store optometrists and 4,500-plus pharmacies, while expanding the clinical capabilities of these units.

---