Wal-Mart, Arcadia HME venture grows

Tuesday, October 31, 2006

SOUTHFIELD, Mich. - With six more Arcadia Home Medical Supply Centers opening in Wal-Marts, the store-within-a-store concept continues evolving, but reviews are mixed.
The company announced Sept. 26 it would open stores in Bradenton, Hialeah, Boynton Beach and Pompano Beach, Fla.; Midland, Texas; and Albuquerque, N.M.
There are currently 85 HMEs located in Wal-Mart Supercenters around the country, said concept mastermind Kim Mairs, president of Boston-based Companion Health Services, which launched the program in 2004. Providers can leverage the Wal-Mart name and retail muscle to pull in the big-box's customers.
"It's a new environment for them," said Mairs. "It is absolutely a different way of approaching the marketplace and consumer. It introduces (Wal-Mart shoppers) to products that they really had never even thought about."
But the model hasn't worked for everyone. Apria phased out its four locations last spring for its stores in Dallas, Albuquerque, N.M.; Phoenix, Ariz.; and Chattanooga, Tenn.
"The results did not meet our expectations," said Lisa Getson, executive vice president of business development and clinical services for the Lake Forest, Calif.-based provider. "The requirements placed on providers in terms of the seven-day-a-week operating hours and high overhead costs contributed to less than desirable financial results."
Mairs declined to comment on financial arrangements, but said overall, HME providers are happy with the program
Robert Newell, vice president of American Medical Oxygen Sales in Valparaiso, Ind., said a lack of sales for higher-priced items like power wheelchairs and scooters contributed to lower-than-projected profit margins for its Wal-Mart venture. The company opened its first retail store in a Mishawaka Wal-Mart in June 2005 but got out when its lease ran out in June.
"We're disappointed we didn't make a go of it," said Newell. "But we will continue to offer retail HME as part of our product mix."
With supercenters attracting 150,000 to 200,000 shoppers each week, the foot traffic alone would seem to guarantee HME sales.
However, those customers don't necessarily fit the profile of the typical HME retail customer, said Jack Evans, president of Global Media in Malibu, Calif, who described the ideal as an affluent baby boomer who doesn't mind spending money on brand items for themselves and their parents.
"Wal-Mart has phenomenal numbers," said Evans. "The problem is a very small number of those people are going to buy from an HME store."