Why expanding the pharmacy is key to Sam’s Club’s growth strategy
Sam’s Club is looking to its pharmacy to drive growth and retention within its overall membership base, adding new services such as same-day delivery and pet insurance.
This year, the company launched free same-day prescription delivery for Sam’s Club Plus members, made improvements to its curbside pickup and launched a new pet insurance program. In an interview with Modern Retail, Sherri Keeth, vp and divisional merchandise manager of health care and over-the-counter at Sam’s Club, shared how the retailer is modernizing its pharmacy business and how important that segment is to its overall growth prospects.
“When our members are engaged in the health care space, … they renew at a higher rate, they shop more frequently, and they also tend to have a bigger overall basket,” Keeth said. “They’re just more engaged Sam’s Club members overall.”
Health and wellness — which includes areas like pharmacy, optical and hearing services, over-the-counter drugs, and nutrition products — is one of the fastest-growing segments of Sam’s Club’s business. Last fiscal year, which ended January 31, Sam’s Club did about $6.1 billion in health and wellness net sales, up from about $5 billion in 2024 and $4.2 billion in 2023, according to Walmart’s annual report.
Anna Brennan, principal analyst covering club and specialty retailers for Kantar, said the pharmacy business is important for club retailers in that they can bring members to the club on a more frequent basis.
“They’re hoping to get to that point where you’re not just thinking of the club to stock up on your pantry staples or your paper goods. You’re able to do that complete shopping trip as you would in a Walmart, Target or anywhere else with that total-picture combination of services,” Brennan said.
She said it’s another way clubs are trying to show members the value of the membership, like how Sam’s Club just rolled out pizza delivery to show off the value of its delivery services.
“We’re seeing the clubs working to remind members of the value proposition and the total value package,” Brennan said.
The power of pet insurance
Sam’s Club also just launched a program in partnership with Spot Pet Insurance that offers discounted insurance plans for Sam’s Club members, as well as more than 110 pet medications for $80 or less without reimbursement forms. As part of this program, the retailer is also offering a flea, tick and heartworm preventative for cats and a heartworm preventative for dogs for no out-of-pocket cost.
“Typically, with pet insurance, you might get prescribed something, then you have to submit a receipt to the insurer, and they’ll maybe send you a check afterward — you might not be sure that everything is covered,” Keeth said. “We worked with Spot to create something really unique in the market, where we have a full list of covered drugs, and you know how much they’re going to cost right out of the gate. Plus, you don’t have to do any of that submitting of receipts to get reimbursed. You just pay out of pocket what it says on the list at the counter, and that’s it.”
Keeth said this process came out of talking to members, who said they would be interested in a pet insurance product if it told them upfront that a specific issue or condition would be covered — rather than making them wait to be reimbursed to know exactly what the co-pay would be.
“We looked at lots of different pet insurance [providers], and we found the one that had the most reliable benefit,” Keeth said. “And then, we approached them with this idea of, ‘Hey, we’d also like to make this prescription dispensing a lot easier in our club.’ And to be honest, it wasn’t something that they really had thought through before, so it was a unique design process.”
The future of the pharmacy
As Sam’s Club remodels all 600 its clubs, the company is bringing its various health services — hearing, optical, pharmacy and over-the-counter products — together in a dedicated shopping area. Keeth said this won’t be possible at every location due to specific floor plans but that it is a priority to bring it to as many locations as possible.
“From a pharmacy perspective, what that means for our associates is better traffic flow and access to patients, and the ability to work both behind the counter and out in front of the counter in that OTC space to help members find their total wellness portfolio,” Keeth said.
Keeth said the company is working to put at least one health services room into each club that pharmacists can use for vaccinations as well as tests, such as for strep throat.
“That capability and regulation, state by state, is expanding, so we’ll have more of those health services rooms to provide a way for our pharmacists to participate in more comprehensive care,” Keeth said.
Sam’s has also improved its pickup system so that members can select curbside pickup as their preferred pickup option — previously, members had to call the pharmacy and communicate that they were planning to use curbside pickup. Without sharing exact details, Keeth said the company is working to get its curbside pickup services even more on par with its grocery delivery experience, despite the fact that regulations and the need to coordinate with doctors can make it difficult to do so. For example, only certified pharmacy technicians can bring the prescription to a customer’s car.
“If you think about Sam’s over the last five years as a total retail experience, we have made great strides with things like Scan and Go or our Just Go technology, where you no longer have to show your receipt. Convenience has really expanded at Sam’s, but in the wellness space, particularly the pharmacy, we were just a little behind,” Keeth said. “A lot of the processes were similar, but they weren’t exactly the same — we weren’t always able to take advantage of the tech right away. What we’re aiming for is to get to parity with the convenient experience that we already have across the total box, and that our members tell us they love.”