Food Stamp Overhaul Worries Retailers

Changes to the Supplemental Nutrition Assistance Program could impact food retailers.

April 11, 2018

WASHINGTON – Retailers already facing stiff competition from online merchants and local businesses now have a new worry on the horizon—the Trump administration’s push to slash the food stamp program by close to $130 billion—20%—over the next 10 years, the Wall Street Journal reports.

The proposals from Republicans aimed at revamping the Supplemental Nutrition Assistance Program (SNAP) are part of the Farm Bill negotiations. The Farm Bill, which will expire September 30, provides SNAP with around 80% of its funding.

For food retailers, changes to SNAP would mean even more tightening as margins continue to erode. “It’s well known that the food industry operates on a 1% profit margin,” said Alex Baloga, CEO of the Pennsylvania Food Merchants Association. “There’s no way to absorb any kind of decrease in sales. It’s just that simple. It would be devastating.”

In 2017, food stamp recipients redeemed more than 52% of those dollars at stores like Target and Walmart, while nearly 5% of the total sales at Family Dollar stores comes from SNAP transactions. Meanwhile, Amazon is part of a federal pilot program, scheduled to start later this year, to allow SNAP payments online.

In February, the Trump administration floated a proposal to replace some SNAP dollars with nonperishable food boxes.