Costco: Growing the menu of health services
The nation’s leading warehouse club operator continues to push into new markets with a determined expansion program both in the United States and internationally. In the process, Costco Wholesale also is extending its reach into the market for pharmacy and preventive health services, surging past the 500 mark in total pharmacies operating in the United States and expanding its menu of health screenings, immunizations and clinical-care offerings.
As of the end of calendar 2016, Costco operated 723 warehouse stores worldwide, generating average annual sales of $159 million. That total included 508 units in the United States and Puerto Rico.
With a capital investment of $2.65 billion, the chain opened 29 new warehouses in 2016, including 21 in the United States; upgraded its distribution, transportation and information technology infrastructure; and remodeled “numerous” stores, according to a company report. It also grew its membership base by 7% to nearly 48 million households, totaling 87 million total cardholders. Costco will add another 16 warehouse stores in 2017, according to president and CEO Craig Jelinek.
Expansion on the pharmacy front has kept pace. “We currently have 501 pharmacies, which includes our specialty, mail order and central-fill pharmacies,” said Becky Dant, Costco’s director of professional services. And despite the fact that the pharmacy department in any Costco accounts for a relatively small footprint amid the store’s towering racks of fast-turning consumables and massive displays of bulk-pack food, apparel, electronics and household goods, those 500-plus pharmacies are luring club members with a steadily growing menu of health-and-wellness products and services.
“Costco Pharmacy is continually looking to expand the health services we offer,” Dant told DSN. That includes one of the retail pharmacy industry’s most extensive health screening programs, and a growing reputation as a major provider of flu shots and other vaccinations.
Costco’s commitment to in-store health events and free diagnostic screenings is well-known, and has been part of the company’s retail mission since the late 1990s, according to recently retired assistant VP pharmacy operations Michael Mastrominica. Costco conducts several screening events per year in each of its operating regions, offering free blood tests for various conditions and immediate follow-up counseling by Costco pharmacists at temporary testing stations in the stores. Hundreds of thousands of club members have taken advantage of the free tests.
“We currently offer screenings for osteoporosis, heart health and diabetes,” Dant said. Costco, she added, also is “one of the largest providers of retail immunizations, which are available without an appointment.”
In addition, Dant said, “we offer a host of other services that make us a valuable health center for a variety of needs.” Among the more recent offerings, she added, are “contraception prescribing [in] all Oregon locations, [which also will be] rolling out in California,” as well as a travel medicine program for members in Southern California, Idaho, Oregon and Washington.
“Our Oregon pharmacists are certified to prescribe and dispense hormonal contraception, [and] naloxone is available in Washington, California, Pennsylvania, Virginia, and Maryland — with plans to expand to additional states,” Dant said. “In addition to the clinical services offered, Costco remains committed to saving our members money on prescriptions, including pet prescriptions.”
Costco’s focus on wellness extends to its expanding healthy food mix, which saw the recent introduction of new private-label Kirkland Signature food items “with a strong emphasis on organics,” Jelinek reported.
In a bid to make shopping more convenient for members, Costco in March debuted a home delivery service for its grocery selection. They launched the delivery option in the Tampa, Fla., market, and is expected to roll the service into other markets this year.