Changes in healthcare reform, tech, demographics and consumer preferences are fueling the growth of a new retail format.
Retail-based healthcare clinics have grown 47% in the past three years, according to new research from JLL. The Retail and the New Healthcare Consumer report found that retail locations, especially shopping centers, are uniquely positioned to capitalize on consumers growing healthcare needs.
Landlords are finding that health-and-wellness tenants often have higher credit ratings, sign longer leases compared to other retailers, and tend to stay in the same location due to the high costs of both additional build outs and the moving of medical equipment, the report said.
“Healthcare expenditures are expected to grow by over 70% to $6 trillion by 2027,” said Greg Maloney, CEO of JLL Retail. “It’s no surprise that landlords are looking to get in on the trend and add health-and-wellness concepts to their retail merchandising mix. Health-and-wellness tenants meet many retail center’s goals by bringing in sales and foot traffic from both patients and medical staff.”
At the end of 2017, there were an estimated 2,800 medical clinics in retail space in the United States, which grew from 351 in 2006, according to Accenture. Additionally, the number of healthcare tenants has grown by 47% in the last three years alone. Applying that growth rate to the healthcare industry broadly, the number of healthcare tenants in retail locations could nearly double by 2022.
“Over the past two decades we have seen massive shifts in how consumers research and buy products, now we’re seeing them eager for this level of experience in all aspects of life, including healthcare,” said Chad Pinnell, director of healthcare at JLL. “We found that most clinic visits at retail locations occur outside of regular physician hours, and increasingly consumers want the convenience of completing all of their shopping and errands in one trip – essentially they want to grab shoes, their groceries and get a flu shot in one swoop.”
Outpatient-related service providers have already found homes in retail locations, including eye care, vaccines and flu shots, preventative screenings, lab tests and routine health exams. Additional and more intensive treatment services, like oncology, specialty care and chronic disease management are being developed.
New-to-market concept, Egg Health Hub, created by Collarmele Holdings, is just one health-and-wellness concept that is looking to transform patient service and the retail landscape. Egg Health, which will deliver diagnostics, therapeutics and wellness treatments, is actively looking to expand into regional malls across the U.S. and take 25,000 sq. ft. -30,000 sq. ft.