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Dollar General is taking a swipe at its big-box retail competitors with a pilot program for healthcare services.
Goodlettsville, Tennessee-based Dollar General has opened mobile healthcare clinics at three stores in Tennessee, partnering with DocGo, which provides mobile medical and transportation services. The mobile clinics will offer onsite services including annual physicals, vaccinations, urgent care and lab testing a couple of days per week at each location.
Dollar General said the pilot program complements its DG Wellbeing health initiative that places more health and wellness products in stores—an initiative that many view as an attempt to take market share from CVS and Walgreens. As of October, DG Wellbeing products were available in more than 3,200 of its nearly 19,000 stores nationwide.
A Dollar General spokesperson did not respond to requests for additional information or interviews with executives.
As Dollar General expands its healthcare presence, some consultants question whether the retailer will have staffing issues like those plaguing the larger healthcare sector.
“Anybody that wants to do something new is going to have to figure out how to staff up,” said Jeff Goldsmith, president of healthcare consultancy Health Futures. “Any one of these folks, whether they’re an existing hospital system or a new primary-care physician enterprise like Oak Street or whatever, I mean the fundamental question is, why work for them? What’s the value proposition for the healthcare worker?”
Big retailers like Dollar General can capitalize on their presence in communities by supporting heavy recruiting efforts and keeping salaries competitive enough to attract the nurse practitioners or physician assistants needed to manage the clinics, said Bryan Niehaus, vice president at consulting firm Advis. If the clinics are successful, Dollar General may choose to do less outsourcing on healthcare services, potentially designing stores to include clinical spaces, as others have done, he said.
Dollar General’s widespread footprint in rural areas could also be a competitive advantage. The company estimates 75% of the U.S. population lives within 5 miles of one of its stores.
Dollar General has been eyeing the healthcare space for years. In 2018, it launched the Better For You program to stock healthier food items such as fresh produce and more nutritional snacks. The DG Fresh initiative, which rolled out in 2019, brought distribution in-house to reduce costs on frozen and refrigerated products. The company also struck partnerships to improve access to COVID-19 vaccinations amid the pandemic.
Corey Tarlowe, an equity research analyst at Jefferies, sees the mobile clinics as a long-term play for Dollar General. “If it works in this smaller subset of stores that are, I think, right around near the headquarters where they can keep a close eye on it, then the one thing that Dollar General has proven is that it has an ability to really scale the initiatives that work,” he said.
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