Kroger Expands Pharmaceutical Efforts with Clinical Trials as Grocers Diversify

To expand its healthcare reach, Kroger is getting into clinical trials.

The grocery giant announced Tuesday (Jan. 24) that its Kroger Health division is working with pharmaceutical organizations to set up a clinical trial site network, running its own studies. The retailer is kicking off the program with a study related to colorectal cancer in partnership with biotech researcher Persephone Biosciences.

“With our team of more than 24,000 healthcare professionals, under the umbrella of America’s grocer, we are positioned at the nexus of food and healthcare, which provides us with the unique opportunity to increase accessibility to clinical trial opportunities,” Colleen Lindholz, president of Kroger Health, said in a statement.

The move extends Kroger’s reach in the healthcare space, enabling the grocer to make its offerings more essential in consumers’ daily lives, fulfilling not only their food needs but also their medical ones.

PYMNTS research indicates that brands and retailers that can meet consumers’ needs across as many pillars of the ConnectedEconomy as possible — how they eat, shop, pay, live, travel, bank, work, communicate, have fun and stay well — have the advantage over those that stay limited to just one. By broadening its presence in the “stay well” category, Kroger is deepening its relationships with its customers.

Moreover, to stay competitive with U.S. grocery leader Walmart, which in addition to food, sells everything from furniture to auto parts, supermarket chains are being challenged to expand into new categories. Consequently, grocers have been adding restaurants to their stores to meet consumers’ meal needs and trying more out-there concepts such as in-store jewelry shops and fitness equipment showrooms. Across the pond, the United Kingdom’s largest grocery chain Tesco has even tried adding a coworking space to one of its stores.

Yet supermarkets’ in-store pharmacy efforts have not always paid off. Before the COVID-19 outbreak, there was a spate of in-store pharmacy store closures as consumers opted for increased options and services at full-format pharmacies such as CVS or Walgreens. These closures continued into the pandemic, with more supermarkets shuttering their in-store pharmacies in 2021.

Indeed, Kroger’s move to expand its presence in pharmacy comes at a surprising time, considering the challenges its healthcare business has faced in the past year amid inflation.

Kroger CFO Gary Millerchip spoke about the cutbacks the company made to its health business last month on its third-quarter 2022 earnings call, responding to a question about how inflation hurt unit growth.

“At the start of the year, we shared that we’ve made the decision to stop dispensing certain drugs in our specialty pharmacy business because it didn’t really tie to overall customer loyalty in our broader business, and it isn’t profitable business for us,” Millerchip said.

That being said, on the company’s second-quarter earnings call, Millerchip spoke to the progress the company had made in improving the economics of its healthcare arm, noting that the company “grew the profitability of our core pharmacy business.”