Food-Stamp Fight: C-Stores vs. Supermarkets

Stricter rules, number of SKUs could knock out smaller retailers

SNAP EBT cards

WASHINGTON -- U.S. regulators are pushing stricter rules for stores that accept food stamps, and the proposal is pitting convenience stores against supermarkets and other large retailers such as Wal-Mart and Kroger over the $74 billion Supplemental Nutrition Assistance Program (SNAP), reported The Wall Street Journal.

By the end of the year, the U.S. Department of Agriculture (USDA) wants to adopt rules that would require stores that redeem food stamps to stock a wider variety of meats and vegetables and sell fewer hot meals, such as pizza, said the report.

Big supermarket chains already meet the tougher requirements because of their breadth of inventory. But approximately 195,000 smaller stores, including convenience stores, would have to add as many as 168 items to their shelves—a move many say would be costly and unprofitable, given their limited shelf space and spoilage issues for fresh food, the report said.

More than a quarter-million U.S. retailers accept SNAP; nearly 42% of those retailers are c-stores, according to a CSP report.

  • Click here to read how the new provisions could cause thousands of convenience stores to have to drop out of SNAP. Also, click here for more analysis.

The new stocking requirements are challenging, said Noon’s Food Stores, a chain of three small retail outlets in Missoula, Mont. “Unlike corporate grocery stores, or big-box stores like Wal-Mart that literally have acres of space under one roof, our stores are each around 2,400 square feet in total,” president Dirk Cooper said in a letter to the USDA obtained by the Journal.

He said the proposed rules benefit large retailers by sending SNAP customers their way when small stores like his are forced out of the program.

“We know that stores benefit from the revenue,” Kevin Concannon, USDA undersecretary for food, nutrition and consumer services, told the newspaper. “But we also believe that with the right to receive these taxpayer benefits for the food, that there ought to be just a basic minimum of healthy foods.”

The USDA’s proposal marks one of the biggest overhauls to SNAP in its 52-year history, aiming to increase access to healthy food for low-income people. It also represents the Obama administration’s latest effort to influence eating habits, the Journal said.

Chart: Wall Street Journal.