Health and Wellness: A Growing Trend in Retail

Consumer Demand for Health and Wellness Products

Consumer demand for health and wellness products is robust, with major retailers like Amazon, Walmart, and Target reporting strong sales and strategic price reductions in these categories. Kroger is also focusing on health interventions to enhance wellbeing, reflecting a significant market trend.

"We've also seen strength in demand in everyday essentials, categories like beauty and health and personal care, where speed is even more important to consumers. 3rd party sellers remain a key contributor to our offering." --- (AMZN, event transcript, 2024/05/22)

"The increase was primarily due to comparable sales, including fuel, of 4.6% for the three months ended April 30, 2024, which benefited from growth in transactions, including strong sales in grocery and consumables and health and wellness." --- (WMT, sec filing, 2025/Q1)

"In May, Target announced it had lowered prices on about 1,500 frequently shopped items across food and beverage, household essentials, health and beauty products and more." --- (TGT, press release, 2024/06/25)

"This groundbreaking event is designed to explore the transformative power of nutrition, consumer product goods, technology, retail and other health interventions that can improve the wellbeing of individuals and communities, reflecting Kroger Health's vision to help people live healthier lives." --- (KR, press release, 2024/05/29)

"While we cannot control or reliably predict general economic health or changes in competition, we believe that we have been successful historically in adapting our business to these changes, such as through adjustments to our pricing and merchandise mix, including increasing the penetration of our private-label items." --- (COST, sec filing, 2024/Q3)

Expansion of Health and Wellness Product Offerings

Retailers are expanding their health and wellness product offerings through personalized care delivery (CVS), value-based care clinics (Kroger), redeploying SKUs towards own brands (Walgreens), trendy health-conscious products (Walmart), and exploring new market opportunities (Target).

"The Company is creating new sources of value through its integrated model allowing it to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs." --- (CVS, sec filing, 2024/Q1)

"The expansion of value-based care offerings through The Little Clinic will help address the growing healthcare needs of seniors in Georgia ATLANTA, May 14, 2024 /PRNewswire/ -- Kroger Health, the healthcare division of The Kroger Co. (NYSE:KR), is collaborating with Better Health Group, a leading value-based primary care physician group and managed services organization, to launch primary care services for senior patients beginning in eight locations of The Little Clinic LLC (TLC) in Atlanta, Georgia area." --- (KR, press release, 2024/05/14)

"This means we will work with fewer partners who are helping us win. For example, in the last quarter alone, we've removed eight national brands and redeployed those SKUs towards own brands and preferred partners within health and wellness categories." --- (WBA, earning call, 2024/Q3)

"The most recent example of that is with our better goods offering. Better goods for those who are not familiar are these more trendy health conscious offerings that we're providing." --- (WMT, conference, 2024/06/25)

"And we're exploring new opportunities, including the potential to expand the scale and reach of our owned brands through wholesaling arrangements in markets we don't currently serve." --- (TGT, earning call, 2025/Q1)

Marketing Strategies for Health and Wellness Products

Retailers like Kroger and Costco emphasize fresh products and personalization to drive loyalty and sales, while Walmart leverages health memberships to enhance business composition. Target and Amazon focus on partnerships and expanding product features to innovate and add value, indirectly supporting health and wellness marketing strategies.

"By executing on our go-to-market strategy built on the four pillars of Fresh, Our Brands, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales." --- (KR, sec filing, 2023/Q4)

"And so if you think about the three main categories in core between foods and sundries, fresh and non-foods, fresh would have continued to have been slightly lower year-over-year, and that's a very deliberate strategy for us to make sure we're delivering more value for the member, and we think that's a really important place for us to drive member engagement and support, especially as we're still seeing some commodities that are a little bit inflationary right now." --- (COST, earning call, 2024/Q3)

"We've sold a number of health memberships. So the composition of that business as well as having our Kashi Financial Services looks different, and that's helping drive the different kind of economics and more richer op inc. As we look at then at eCom across the globe, I'd probably call out China." --- (WMT, earning call, 2025/Q1)

"Our partners know our playbook. They understand how we go to market, and they are terrific partners in bringing that experience to light, in bringing us great products, innovation and contributing to the value equation for Target." --- (TGT, earning call, 2025/Q1)

"They are profitable in their own right. They are adding selection, they're adding new features like grocery there, adding to their Prime benefits, and a lot of the work that we do in the United States carries over there." --- (AMZN, earning call, 2024/Q1)

Partnerships and Collaborations in Health and Wellness

Retail giants like CVS Health, Amazon, Walgreens, RadNet, and Kroger are forming strategic partnerships to enhance health services, promote health equity, and improve access to nutritious food, underscoring a collective commitment to advancing public health and wellness.

"We help people navigate the health care system – and their personal health care – by improving access, lowering costs and being a trusted partner for every meaningful moment of health." --- (CVS, press release, 2024/04/25)

"This collaboration will help organizations like the District of Columbia Department of Health speed innovation, improve customer service, and improve productivity, while keeping data private and secure." --- (AMZN, press release, 2024/04/30)

"This partnership underscores a shared commitment to advancing public health through innovative research and leveraging Walgreens' extensive community pharmacies to increase access and representation in clinical trials." --- (WBA, press release, 2024/07/23)

"RadNet and Swoopes will together support a movement towards greater health equity and collaborate on efforts to combat healthcare disparities." --- (WMT, press release, 2024/04/12)

""The fact is, in addition to millions of Americans not knowing where their next meal will come from, many also experience ‘Hidden Hunger' and are deficient in key nutrients," said Charles Blazevich, Senior Manager, Corporate Partnerships for Feeding America." --- (KR, press release, 2024/07/13)

Technological Advancements in Health and Wellness Retail

Technological advancements in health and wellness retail are being driven by innovations such as AI in healthcare systems, new health metrics apps, and improved data sharing. Companies like Amazon, Apple, and Microsoft are at the forefront, enhancing patient care, fitness insights, and healthcare data utilization.

""Together, we are not only advancing medical imaging, but also helping deliver more accessible and better-quality patient care in a very resource-constrained environment." The industry continues to see rapid advancements in generative AI in radiology and other imaging specialties." --- (MSFT, press release, 2024/07/24)

""As healthcare systems like Mass General Brigham lean into AI to accelerate their work, we see great potential for new foundation models that utilize advanced technologies."" --- (AMZN, press release, 2024/07/25)

"The new Vitals app surfaces key health metrics and context to help users make more informed day-to-day decisions, and the ability to measure training load offers a game-changing new experience when working out for improved fitness and performance." --- (AAPL, press release, 2024/06/10)

""At the same time, this exciting combination significantly strengthens our financial profile, offers massive commercial growth opportunities in one of Avant's largest target markets, and bolsters our internal customer support and R&D capabilities." The goal of this deal is to bring together Avant Technologies and Wired-4-Health to improve how healthcare data is shared and used." --- (MSFT, press release, 2024/04/25)

"And that's the Vitals app, a new way to quickly view your most important health metrics, receive alerts when it's time to pay more attention to your body, and gain better context when it comes to your health." --- (AAPL, service launch, 2024/06/10)

Consumer Behavior Changes in Health and Wellness

Consumers are increasingly seeking value amid higher prices, prompting retailers to better understand and cater to their needs with relevant offerings and ads. This shift is also reflected in changes in discretionary spending, indicating a growing focus on health and wellness.

"That's good for our advertisers and helps us better understand our customers and members much better so that we can provide the types of offerings and ads to them that are relevant and affect their behavior." --- (WMT, conference, 2024/06/25)

"We hear that from our customers. We see it in their behavior. Certainly, customers are looking for value during higher prices or with higher prices." --- (WMT, conference, 2024/06/25)

"And if any in spending within the categories reflect anything about whether the consumer is making any incremental changes in their discretionary spending?" --- (WMT, earning call, 2025/Q1)

Regulatory Impacts on Health and Wellness Retail

Regulatory changes in Medicare programs and compliance requirements significantly impact health and wellness retailers like CVS and Amazon, affecting funding, labor practices, and operational income. Utilization pressures in Medicare Advantage and efforts to maintain financial terms with partners further underscore the regulatory challenges faced by the sector.

"Key Regulatory Trends and Uncertainties • The Company is exposed to funding and regulation of, and changes in government policy with respect to and/or funding or regulation of, the various Medicare programs in which the Company participates, including changes in the amounts payable to us under those programs and/or new reforms or surcharges on existing programs, including changes to applicable risk adjustment mechanisms." --- (CVS, sec filing, 2024/Q1)

"Supporting proposal 17 will protect our workforce, ensure regulatory compliance and enhance our reputation." --- (AMZN, event transcript, 2024/05/22)

"So we think that reducing capacity in the industry is not a bad thing. We think it's good for the labor so that we're not actually overusing pharmacists in stores that we don't need." --- (WBA, earning call, 2024/Q3)

"This morning, we announced first-quarter results that were burdened by utilization pressures in Medicare Advantage, which materially impacted our healthcare benefit segment." --- (CVS, earning call, 2024/Q1)

"• As you review the Health Services segment’s performance in this area, you should consider the following important information about the business: • The Company’s efforts to (i) retain existing clients, (ii) obtain new business and (iii) maintain or improve the rebates, fees and/or discounts the Company receives from manufacturers, wholesalers and retail pharmacies continue to have an impact on adjusted operating income." --- (CVS, sec filing, 2024/Q1)

Future Outlook and Predictions for Health and Wellness in Retail

Retail giants like Costco and Target see expanding health and wellness offerings as key growth drivers. Apple is enhancing its health tech, while Walmart focuses on adapting to market trends. These strategies indicate a robust future for health and wellness in retail.

"I mean, we really do indeed see that. I think especially with our limited SKU count in the warehouse, how can we expand the offering to the members, bring value to their membership card beyond what's within our four walls or what's on costco.com and we see this as a great growth driver for us in the future and a way to bring expanded value to the members as we look forward." --- (COST, earning call, 2024/Q3)

"And we certainly felt much better about the sequential improvement in traffic, getting back to positive digital growth for the first time in over a year, continued strength in services like Drive Up and categories like Beauty, and a very significant trend line improvement in apparel." --- (TGT, earning call, 2025/Q1)

"And now here's symbol to tell you about a new app that will give you a better picture of your health." --- (AAPL, event transcript, 2024/06/10)

"But things could change. And again, it's hard to call the future. So we really we watch units closely, so we can buy a lot of our categories that we buy 6 and in some cases 12 months out." --- (WMT, conference, 2024/06/11)

"That obviously can change in the future. Being a company that's been around for 62 years, we've experimented in a lot of markets, Brazil, Japan, Europe, and we have figured out where value proposition works really well and the reverse of that where it doesn't." --- (WMT, conference, 2024/06/12)