Walmart is opening five more animal and pet treatment centers

Walmart closed its doctors’ offices to the public. But the country’s largest retailer is expanding its pet care business.

On Tuesday, the company announced it will open five more pet services centers in October and early November. The new locations in Arizona and Georgia will include animal care and grooming. Walmart opened its first pet center last year in the Atlanta area.

Walmart’s pet division is an attractive growth opportunity because it buys frequently, touches customers of all age groups and tends to hold even when customers’ budgets are stretched, said Kaitlyn Shadiow, vice president of pet merchandising at Walmart US.

Walmart pet service centers will have their own dedicated entrance next to the store. They will be under the Walmart name, but staffed by animal care workers and pet product company PetIQ. The centers will provide routine veterinary care, such as health exams, vaccinations and minor medical services, as well as grooming for cats and dogs.

Shadiow said Walmart decided to expand after seeing strong visits and repeat prices at its first pet services location. About 25% of customers had never bought pet supplies at Walmart before, he said. And when shoppers went to the store for pet supplies or grooming, Shadiow said it created a “halo effect” that boosted sales of pet food and other items.

“When you think about pet supplies, the business case is there,” she said. “We already serve the needs of many pet parents today, and it’s a great opportunity for us to help do that in one convenient location or trip.”

Other factors may favor Walmart. Chewy again Petco they have expanded into pet services as well, with specialty retailer Petco using its stores to become a major pet supplier. Services are more expensive than pet food, but they are needed more often than other supplies such as leashes, pet beds and crates.

Pet ownership is on the rise during the Covid crisis, leading to more spending on homes for dogs, cats and other animals, and a greater demand for vets. Annual household spending on livestock is expected to reach $1,445 per animal in 2026 and $1,733 in 2030, according to a recent study by Morgan Stanley Research. That would represent a 113% jump in total industry spending from $122 billion in 2019 to $261 billion in 2030, the company found.

Walmart has seen other signs of high demand. Signing up for animal health provider Pawp has been used more than any other limited-time Walmart+ offer, merchant membership program and feedback Amazon Prime, according to Vanessa Yates, senior vice president and general manager of Walmart+. Starting next week, it will turn that limited-time offer into a permanent deal.

The pet section has it it was a way to reach younger and wealthier consumers, said Shadiow. Gen Z is the fastest-growing segment in Walmart’s pet category, as the group ages into pet ownership, he said. The number of customers buying the pet category with a household income of more than $100,000 grew 36% year over year, as of the end of July, he said.

Walmart announced earlier this year that it would close all 51 of its health clinics — a sharp change for the company, which is facing a “challenging reimbursement environment and rising operating costs.” The clinics offered low-cost doctor visits, dentist appointments and medical appointments.

Walmart also closed its in-person telehealth provider, which it had acquired for an undisclosed amount in 2021. It tested the concept of pet services in Dallas, Georgia, where it opened its first human health clinic in 2019.

However, Shadiow said taking care of pets is an easy and profitable business. Fewer people pay for pet care through insurance and the facilities themselves can be small, he said. People want transparent pricing as they often pay out of pocket. And, he said, Walmart is a one-stop shop for customers who need related products, such as pet prescriptions or food.

“We feel very confident that this will be successful in the long term,” he said.

– CNBC’s Gabrielle Fonrouge contributed to this report.