Walmart’s GLP-1 Strategy Could Reshape Grocery | Fast Five Shorts

Walmart is expanding its Better Care Services platform to include weight management support for customers on or exploring GLP1 therapies, connecting its nearly 4,600 store pharmacy network with virtual care providers, nutrition support, same day medication delivery, all under one digital destination.

According to Walmart's corporate website, the Better Care Services platform now features weight management support from five third party providers spanning personalized fitness programming, registered dietitian services, AI supported coaching and telehealth based medication management.

The platform also includes access to a full range of GLP medications including the including the newly available oral option.

Ben?

Yes, the newly available oral option Foundeo or Fulgrapron for those that like what?

I mispronounce generic drug names which I was waiting to do.

All of which are available through insurance or transparent cash pay pricing.

All right, Ben, here's my question for you.

In your Shop Talk Zeitgeist, which you gave just back in March, So less than two months ago, you said that GLP1S was one of the top six or seven trends that would impact retail over the next decade.

So I'm guessing you love this move from Walmart.

My only question is how much?

Yeah, you're absolutely right.

You've guessed it.

I love it and I love it a lot.

So let's take back to some of the points that we made in the presentation back in March.

Why do we think GLP1S is going to have such an impact on the retail market?

I mean, firstly, look at the growth numbers.

So Morgan Stanley currently predicts that the 2 to 3% of the US population that are taking GLP1s over the next decade could grow to 20%.

Okay.

Okay.

At the moment it's about 1% globally, that could grow to 10%.

So huge growth.

Okay.

Now what we do in the Zeitgeist is we look at, okay, what do we think are the big trends and what do we project them forward?

And the point that I was trying to land in the Zeitgeist is that I think collectively as an industry, we still underestimate what the impact of GLP1 is going to be on retail.

So let me kind of unpack this.

Yeah.

Just this week McKinsey published some brand new research.

They looked at 21 food and beverage categories to look at what the spend trend is.

For people who've been on GLP1s for over six months, of the 24 categories, only four had seen an increase in spend.

And of those, yoghurt had seen the biggest increase.

But that increase was only 2 1/2 percent.

Okay, okay.

On the other side it was negative 11 1/2% for crisps and snavery snacks.

It was negative 8 1/2% for sweet bakery.

So look, why do I love this headline?

I love this headline because clearly Walmart doesn't underestimate its impact.

Yet Walmart has recognized it and it's connecting its digital ecosystem in a way that it can because the properties that he's built to really help customers to understand and at the same time to learn more about what's going on.

So Ben, I'm curious, does that mean that, does that mean that Walmart and others are also just at risk from GLP1 in terms of declining revenue overall as people are just starting to eat less as well?

Yeah.

So one of the things we found people are eating less but what they are prioritizing is small portions on the go.

Convenient solutions, products that help with digestive ease.

Digestive solutions.

So diets are changing that people are buying more often so it leads itself to more convenient products, more fresh which are higher margin.

So there's a massive category shifts.

If you follow those shifts and provide the solutions that people in need, there's actually margin gains to be made there.

But it's about recognizing and not underestimating.

That was the, the point I was trying to.

Right, right.

And the pharmacy, and the pharmacy keeps the foot traffic, foot traffic coming to the Walmart store too.

Can I just say as a, as a, as a final point.

Yeah.

I really love to hear what you think of this, but I love anything that connects the pharmacy to the rest of the store.

Look, running pharmacy, it's a hard business.

It's hard people cost could be dangerous.

Anything that provides a greater halo than just foot pharma, I think it's a real positive and I love the Walmart leading into that.

Yeah, Yeah.

I mean 100% on the pharmacy side.

I mean I don't, I don't have much to add.

I mean that's why I wanted you to share the data that I know you always bring to the table on this because it is really interesting to think about, you know.

And then there's also the question that I have too, which I didn't ask you about, which I'd love to get your thoughts on.

Maybe at the end is like, you know, you get all these reports and some, in some ways all these reports happening at the same time get a little bit self enforcing in terms of the predictions that everyone's making around the severity or the impact and so you always have to take that with a grain of salt.

But, but to your point, you're saying like there's, there's going to be a palpable impact here.

So, so I like it because, you know, Walmart is basically attacking what is a sizable trend through their pharmacy which engenders loyalty in their customer.

I think it's a pretty, it's pretty remarkable given the effort and some would say failed efforts they put into their clinics as well.

And now they're doing this digitally.

So I think that's important.

You know, it's asset light approach to doing this, which is very different than where they were like two or three years ago.

Yeah, I love that.

And then the other point I'd make to, the second thing I make is they've learned Walmart has done a great job of learning how to speak to their customer digitally and specifically via the Walmart plus subscriber too.

So I think this is a very, and this is very much who this is geared after.

Even though you're saying in those numbers you're probably hitting the broad base of America too, and the broad base of consumers globally, but that is who you're gearing this towards.

And Walmart plus it's going to come up again later too, as part of their strategy, but you can see how they're continuing to try to lean into that as kind of their competitive moat, so to speak, in the landscape.