Apr 6, 2018

Grocery stores worry about Trump's pullback on SNAP

A customer checking out of a grocery store.

The checkout in Publix. (Photo: Jeffrey Greenberg/UIG via Getty Images)

Grocery retailers around the country have growing concerns about President Trump's plan to reduce food-stamp spending by $130 billion over the next decade, reports the Wall Street Journal. That would amount to a 20% reduction in the program's $63 billion annual budget.

Why it matters: Retailers are already facing stiff competition from grocers like Whole Foods with Amazon's backing. Now, they may lose sales from low-income consumers because of regulation.

The changes:

  • More stringent requirements would reduce the number of consumers who are eligible for the food-stamp program.
  • Rather than receiving benefits on cards, food stamp users would receive benefits in boxes of cereal, beans, canned fruits and other government purchased food through wholesale channels.

Industry concerns:

  • The food industry operates on a 1% profit margin, Alex Baloga, chief executive of the Pennsylvania Food Merchants Association, told the journal. Any SNAP loss could be devastating to the industry.
  • The nation's biggest retailers would lose key revenue sources.
  • Purchases at big box stores like Walmart and Target accounted for 52% of dollars spent through SNAP in 2017.
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