Walmart Inc.'s partnership with a national chain of veterinary clinics has delivered walk-in pet health care to 20 stores this year, with plans for many more over the next five years. VetIQ Petcare Wellness Centers provide exams, vaccinations and other nonemergency care for cats and dogs daily without an appointment.
In Arkansas, clinics are open inside Walmart supercenters in Harrison, Van Buren, Mountain Home and Batesville. VetIQ Petcare opened its first clinic in Oklahoma in mid-March. By mid-July, the 20th opened in North Carolina. The remaining clinics are in Missouri, Pennsylvania and Oregon.
Clinic owner PetIQ Inc. said it will open more than 1,000 clinics in Walmart stores and as-yet-unnamed retail stores across the country by 2023. However, a Walmart spokesman said last week that the Bentonville-based company is monitoring customer response with PetIQ before proceeding with expansion plans.
A clinic chain called VIP Petcare had 1,400 veterinarians working in its pet and feed stores nationwide when PetIQ acquired it in January for $220 million. The Idaho-based maker and distributor of pet products and medications then began forming landlord-tenant relationships with Walmart and other retailers to lease in-store space for the clinics.
The Walmart-PetIQ partnership is part of a larger trend in the U.S. veterinary services industry, which market research firm Packaged Facts says is undergoing transformation. Long dominated by independent practitioners, the industry is experiencing consolidation as retailers, pet product manufacturers and even investor groups buy up veterinary and nonmedical pet-service providers.
Besides Walmart, Petco and PetSmart are striving to add or expand veterinary services in their stores, according to Packaged Facts' recent report "Pet Industry Outlook: Veterinary Services and Pet Product Retailing." Mars Inc., maker of several brands of pet food, has purchased some of the nation's largest animal hospital chains. Last September, it acquired VCA Inc. with its 800-plus animal hospitals for $9 billion.
Also, private equity firms including Morgan Stanley, KKR and Shore Capital Partners are adding veterinary practices to their portfolios.
The lucrative pet-care industry is attractive to retailers. In 2017, Americans spent nearly $70 billion on their pets, according to the American Pet Products Association. Almost half of that was spent on food, but nearly $18.3 billion went to veterinary care.
Dave Marcotte, senior vice president for retail insights at Kantar Consulting, said he thinks PetIQ's plans with Walmart are a "smart move" for both companies. He pointed out that most pet owners dote on their pets and treat them almost as children.
"If you go in stores today, the most emotional part of the store is pets," he said. "It used to be baby, but now it's pets. It's a very emotional space and it adds an emotional element to the store. I can't overemphasize that. Everything about merchandising, marketing, creating experiences in the store is about emotion."
Marcotte said once pet owners are in the store, they are likely to get their pet's prescriptions filled at the pharmacy and buy food, toys and other pet items.
And while Walmart has leased space inside its stores to other businesses for years, liability issues make the landlord-tenant model especially suitable for a veterinary clinic, Marcotte said. In a scenario in which a pet died after being treated at a clinic owned by Walmart, for instance, the retailer could possibly be held liable. However, renting space to a clinic owned by a third party keeps the businesses separate and lessens the risk, he added.
Marcotte said the model also makes it easier for the clinic to keep prices down, a point Nate Smith, president of PetIQ's service division, also noted.
"VetIQ Petcare clinics at Walmart provide pet owners improved access to the professional veterinary services they need most, in a convenient and affordable clinic located at their Walmart Supercenter," Smith said in an email. While meeting the veterinary service needs of pets and their owners, he said, the location inside Walmart highlights access to the pharmacy and over-the-counter medications, health and wellness products, food and other items in the store.
VetIQ Petcare's website shows a menu of services available for dogs and cats, including routine physical exams, bloodwork, vaccinations, microchipping and deworming. Prices also are listed. Basic physical exams for cats and dogs cost $45, for instance. Some services are bundled into packages at a discount, such as the dog or cat Senior Wellness Pack and kitten and puppy Smart Start Series.
Prescriptions from the veterinarian can be filled at the store's pharmacy, and while the clinics focus on routine care, they will work with local animal hospitals and refer pet patients needing urgent or significant medical care.
Walmart is "always looking for new ways to improve our local customers' shopping experience," the retailer's spokesman said, "and vet services are one example of that. We are excited to be working with PetIQ to offer our customers convenient access to high-quality, low-cost vet care."
SundayMonday Business on 08/12/2018
Print Headline: Walmart trying out pet clinics as tenants