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The U.S. retail clinics market size was USD 1.78 billion in 2020. The market is projected to grow from USD 3.49 billion in 2021 to USD 4.40 billion in 2028 at a CAGR of 3.4% during the 2021-2028 period. The impact of COVID-19 has been unprecedented and staggering, with the U.S. retail clinics witnessing a lucrative positive demand amid the pandemic. Based on our analysis, the U.S. market exhibited a higher growth of 21.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden drop in CAGR is attributable to the market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
A retail clinic is a type of walk-in healthcare institution situated in retail stores, pharmacies, and supermarkets that treat minor illnesses and provide preventative health care services. When retail clinics opened first in the U.S., in 2000, there were numerous concerns regarding the quality of care in these healthcare institutions. However, these concerns were unverified shortly thereafter, as it was proved that the quality of care in the U.S. retail clinics were of a superior quality. Furthermore, timely medical intervention with improved patient outcome is extended to various patients at a lower cost, which is expected to lead the U.S. retail clinics market growth over the forecast period.
One of the most critical drivers that is positively impacting the growth of the U.S. industry is the significantly lower costs in these settings compared to other settings. For instance, over the past two decades, there has been a consistent increase in patient population visiting clinics for a wide range of medical requirements. This has led to an increasing demand for these settings that can provide effective medical care leading to better patient outcomes, and also increased the accessibility of healthcare to a wider strata of the population. For instance, in May 2021, Geisinger Health announced to open a new ConvenientCare+ in Geisinger’s South Wilkes-Barre campus. The clinic will have additional resources such as access to laboratory and imaging services.
Increasing Demand for COVID-19 Vaccines & Therapeutics to Support the U.S. Revenue Growth Amid Pandemic
Walk-in clinics have provided patients with convenient access to healthcare services during the pandemic. With these institutions in the U.S. providing COVID-19 testing services and vaccinations, patient visits have gone up significantly in 2020. Patients will continue to use these institutions for their basic healthcare needs due to convenience, quality, and low costs offered by these healthcare settings. The industry witnessed a significant growth of 21.5% from 2019 to 2020. The pandemic displayed the role that these settings can play in providing low-acuity care due to the COVID-19 testing and vaccination services provided in these settings.
The rise in popularity of these institutions during the pandemic has encouraged major players such as CVS, Walgreens, and Walmart to expand their presence in the market. With increased awareness among the population about the benefits provided by these institutions (present at convenient locations, offering affordable care) during the pandemic, it is expected that the market will continue to grow considerably over the forecast period. Furthermore, growing initiatives to reduce patients visiting hospital settings amid the pandemic further surged the demand for the product in 2020. For instance, near-virtual office visits enhance the chance for patients to conveniently get access for care outside a provider's office by merging physician consults near home sites with virtual access for immunizations and testing such as worksite clinics. Virtual visit of a patient with COVID-19-like symptoms or flu could be followed up by a visit to a nearby retail clinic for COVID-19 test or immunization, with a subsequent follow up virtual check-in with the primary care physician to consult on follow-on care. Hence, the factors mentioned above have significantly supported the market growth in 2020, thereby reflecting a positive COVID-19 impact on the U.S. industry.
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Increased Focus on Developing Telemedicine Services in Retail Clinics to Lead to Greater Adoption of These Institutions
One of the most critical trends witnessed in the industry is that there has been an increased focus on developing telemedicine services in these settings in the U.S. over the past couple of years. According to a research published in October 2020 by the Centers for Disease Control and Prevention (CDC), during the first quarter of 2020, telehealth visits rose by 50% compared with the same period in 2019. Furthermore, one of the most critical factors driving the market growth is that telemedicine is an affordable option in medical care, thus supporting high services adoption. Hence, an increasing number of prominent market players are focusing on offering telemedicine services in these institutions. For instance, in July 2021, CVS Health announced that the company’s offering of telehealth via its clinics chain of MinuteClinic was now available in the U.S. state of Nevada. The company in its quarterly filings of Q1 2020 had stated that it witnessed 600% jump in telehealth consultations.
Increased Inclusion of Diverse Healthcare Services to Augment Market Growth
One of the critical and essential drivers in the U.S. industry is the substantial increase in services available in these locations. The need for better and improved medical intervention increases as the general populace is becoming more aware of the benefits of preventive medical care. Hence, a significant proportion of the patient population is opting for preventive and basic medical care to treat their medical conditions before it becomes more chronic or serious in terms of nature. This has led a number of retail clinic companies in the U.S. to diversify their services portfolio. Apart from physical health, several retail clinic companies also focus on providing services related to mental health, as more individuals become aware of the benefits of well-functioning behavioral health. For instance, in May 2021, CVS Health announced that it was adding mental health services and counseling at 11 of the company’s Philadelphia and South Jersey MinuteClinics in response to the strong demand for such services since the beginning of the coronavirus pandemic.
Expansion Initiatives by Key Companies to Open New Establishments in the U.S. to Lead to Market Growth
One of the major drivers for the industry in the U.S. is that several expansion initiatives in the form of new walk-in healthcare establishment openings are being undertaken, which is anticipated to contribute very strongly to the growth of the market over the forecast period. There are numerous advantages of this strong momentum of expansion initiatives. Some of the advantages of this expansion initiatives include greater access to patient population, which leads to greater volume of patient visits to these settings. Furthermore, these expansion initiatives potentially give access to the underserved regions of the U.S. as numerous institutions are concentrated in the Midwestern and Southern U.S. For instance, in June 2019, CVS Health announced plans to open 1,500 HealthHUBs by the end of 2021. The company is on track in terms of opening new HealthHUBs with an estimated 850 HealthHUBs built by mid of 2021. According to an article in Fierce Healthcare in September 2020, Walmart announced the expansion of its in-store health clinics with new establishments to be opened in Chicago, Georgia, and Florida.
Lack of Provision for Treatment of Complex Diseases Might Restrict Market Growth
Despite a critical and increased need for retail clinics, one of the strong hindrances toward the market growth is the lack of provision for the treatment of complex diseases in such settings. Despite increasing demand for chronic disease management in the U.S., limited presence of advanced medical equipment in the U.S. retail clinics for treatment of complex diseases may decrease service adoption rates. Lack of resources, such as medical equipment and expertise, to treat serious chronic conditions is expected to hinder the market growth as it leads to decreased rate of patient visits. Furthermore, as the U.S. witnesses the trends of aging population, there are projections that a number of older patients shall visit these institutions more for medical treatment. However, in the older population, even simple disease diagnosis such as urinary tract infections (UTIs) require more advanced examination. Hence, these institutions are unsuited for such complex medical intervention. Furthermore, another factor that hinders the market growth is the long wait time patients have to face for a regular checkup in these U.S. institutions.
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Sore Throat Segment to Dominate Service Type in 2021-28
Among service type, the market is segmented into acute respiratory infections, sore throat, conjunctivitis, urinary tract infections, immunization, screening services, and others. The sore throat segment held significant market revenue in 2020 and is anticipated to register lucrative growth during the forecast period. The strong market share of the segment is attributable to the substantial number of patient visits to these institutions, the ease of obtaining quick medical intervention, and the comparatively lower cost of treatment. For instance, according to a research published by Xtelligent Healthcare Media, LLC in August 2018, nearly 30% of all visits to retail clinics were for sore throat or acute sinusitis symptoms. Dependency of patients on these institutions for minor ailments is expected to contribute to the segment’s growth over the forecast period.
The immunization segment was the largest segment in 2020 and is anticipated to register tremendous growth during the forecast period. In terms of obtaining vaccination from infectious respiratory diseases, such as flu, these institutions serve as a popular setting. For instance, according to a research published by Xtelligent Healthcare Media, LLC in August 2017, offering retail clinic access boosted the rate of patients receiving flu shots from 32.2% to 40.3%.
Retailer-Owned Operators Segment to Dominate in 2020
Among ownership, the retailer-owned operators segment held significant market revenue in 2020 and is anticipated to register lucrative growth during the forecast period. Presence of a strong number of these institutions in the U.S. operated by retailer-owned operators coupled with strong market expansion initiative is expected to contribute to the segment's growth. Furthermore, retailers, such as CVS, accounted for an estimated 48% of retail clinic visits in the U.S. in 2019.
The hospital-owned operators segment is expected to account for a comparatively lower market share due to a relatively lesser number of these institutions operated by hospitals. However, recent developments such as outsourcing the operations of these institutions by retail chains such as Walgreens to hospital-based operators are expected to contribute to the segment’s growth.
By Location Analysis
Strong Number of Patient Visits to Drive the Retail Pharmacies Segment in 2020
The retail pharmacies segment held a dominant share in 2020 among the location segment. The dominance of the segment is attributable to the strong number of patient visits to walk-in health establishments situated inside the retail pharmacies such as CVS and Walgreens. Furthermore, expansion of services offered by the walk-in clinics such as telemedicine is also expected to contribute to the segment’s robust expansion.
The groceries/retail stores segment is expected to account as the second dominant segment during the forecast period. Substantial number of these institutions are operated by grocery chains such as Kroger and Walmart in the key states of the U.S. such as Ohio, Kentucky, and Texas, which is expected to contribute to the segment’s growth prospects. Furthermore, expansion plans such as opening new establishments are expected to contribute to the segment’s growth.
The industry in the U.S. is anticipated to witness a significant growth rate over the forecast period. High share of the country is majorly due to the presence of several walk-in clinics operating in the U.S. Moreover, increasing effort from various operators to expand service offerings is another significant factor driving the market growth in the U.S. Also, new players are aiming to enter this market such as Amazon and Dollar General. In July 2020, Amazon announced plans to open retail health clinics near fulfillment centers. The initial phase of the plan entails the establishments of 20 such institutions in five cities across the U.S. Hence, the factors above are responsible for robust growth in revenue of the market over the forecast period.
Strong Number of Locations Coupled with Provision of Diverse Services to Lead to CVS, Walgreens, and Kroger’s Market Dominance
The competitive landscape of the U.S. market is consolidated in nature. The key players operating in the U.S. are CVS, Walgreens, and Kroger. These three companies together account for more than 85% of the U.S. industry.
CVS is the dominant player in the U.S. The company’s market dominance is due to the large number of locations operated by the company in the U.S., and the diverse services portfolio of the company’s retail clinics. It has a comprehensive services portfolio for diagnostics, women’s health, and common illnesses. CVS has more than 1,000 retail clinics, its expansion & adoption of new trends is contributing to the dominant position in the market. Walgreens is another major player in this market. The company has a robust services portfolio in retail clinics across the U.S., and has strong tie-ups with insurance companies. Also, Kroger is considered a prominent player especially due to its strong network of groceries and retail stores across many regions.
An Infographic Representation of U.S. Retail Clinics Market
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The market research report covers a detailed analysis of the industry. It focuses on key aspects, such as major companies, service type, ownership type, location, and few others. Additionally, it offers insights into the market trends and impact of COVID-19. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion)
Fortune Business Insights says that the U.S. market stood at USD 1.78 billion in 2020 and is projected to reach USD 4.40 billion by 2028.
In 2020, the market value stood at USD 1.78 billion.
The market will exhibit steady growth at a CAGR of 3.4% during the forecast period (2021-2028).
By service type, the immunization segment will lead the market.
Strong number of locations, availability of healthcare at lower costs, diverse services portfolio, and increasing presence of key companies in the U.S. market to strongly drive market growth.
The key companies operating in the market are CVS, Walgreens, and Kroger.
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