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Walmart, the retail giant, just might expand to the most unlikeliest of places; the skilled nursing home industry.

The Bentonville, Ark.-based retailer and Humana Inc. (NYSE: HUM) are reportedly in the early stages of talks regarding potential collaborations, according to reporting in The Wall Street Journal and Bloomberg. The details of the alliance remain murky, though Bloomberg noted that a full merger is unlikely and that the two parties are exploring “a wide range of options.”

Walmart: Health Care Plans

The Bentonville, Ark.-based retailer and Humana Inc. (NYSE: HUM) are reportedly in the early stages of talks regarding potential collaborations, according to reporting in The Wall Street Journal and Bloomberg. The details of the alliance remain murky, though Bloomberg noted that a full merger is unlikely and that the two parties are exploring “a wide range of options.”

Humana itself is in the process of acquiring a stake in Kindred at Home, the home health business of Kindred Healthcare (NYSE: KND); a final Kindred shareholder vote on that transaction, which will see a pair of private equity firms also taking slices of Kindred at Home, will wrap up this week.

Walmart: Sizing Up Their Competition

Walmart sees that Amazon is growing because they’re ‘the Everything Store. So Walmart has to go one better and also expand into areas where Amazon doesn’t compete.

For instance, Walmart heavily promoted its e-commerce website this holiday season to offset Amazon’s dominance. Expanding into the nursing home business offers a way for them to derail Amazon’s health care moves.

Walmart understands the value of acquiring a nursing home provider with an impeccable reputation and expanding the operations where possible.

Walmart: The Current Nursing Home Landscape

The opportunity can become even more tempting considering the demographic shifts on the horizon. They dominate in rural areas. In addition, they have an established and solid list of vendor partners and an excellent logistics network.

Conclusion

Health care, PBM [pharmacy benefit management], nursing home facilities, and hospitals are all businesses where having a physical presence is required. Walmart already has its own foodservice and pharmacy stores which they can leverage. Thus, expansion into health related services including nursing homes is, for them, the logical progression.