SNAP OK’d for Online Grocery Pilot with Amazon, Walmart

New York recipients may use benefits to buy groceries online, and the two-year pilot may expand to Safeway, FreshDirect and Hy-Vee.

April 22, 2019

NEW YORK — The U.S. Department of Agriculture is kicking off a two-year pilot that allows recipients of the Supplemental Nutrition Assistance Program (SNAP) to use their benefits to buy groceries online, according to CNN Business.

Amazon and ShopRite, which is expected to join the pilot this week, will service the New York City metro area, while Walmart will cover upstate locations. Nearly 2.7 million SNAP recipients will be able to use their benefits for online grocery and delivery through the pilot.

“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food—by ordering and paying for groceries online,” Agriculture Secretary Sonny Perdue told CNN. “As technology advances, it is important for SNAP to advance, too.”

The USDA reported that Dash’s Market, FreshDirect, Hy-Vee and Safeway also will join the New York pilot. CNN Business says that the test will gradually expand to the rest of the state and then take shape in Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington.

If successful, the opportunity could impact c-stores. Convenience stores currently represent 45% of all retail outlets authorized to accept SNAP benefits—and they are traditionally the only establishments easily accessible by walk-in or public transport in low-income areas. With these new changes, SNAP recipients may be enticed to purchase necessities online and get delivery instead.

CNN Business noted that convenience stores, dollar stores and drugstores have taken food-stamp market share away from Walmart and big box retailers in recent years as they add produce and healthier food options. “Walmart, Amazon and others hope that offering food stamp recipients the opportunity to buy online will help them stand out against convenience and dollar stores that don't offer delivery,” according to CNN.

The food stamp market is worth $63 billion nationally—and in 2017, nearly 82% of all food stamp dollars were spent at supermarkets and superstores, according to USDA data.

Meanwhile, comments are due by June 4 on the department’s proposed rule to update the definition of “variety” as it relates to eligibility requirements for retailers participating in SNAP.