The nation’s convenience and grocery industries are sounding the alarm that proposed restrictions to the Supplemental Nutrition Assistance Program (SNAP) could cost retailers across all channels $1.6 billion to implement. This came as the government shut down on Wednesday, raising questions about how SNAP might be affected.
The National Association of Convenience Stores (NACS), National Grocers Association (NGA), and Food Industry Association (FMI) on Wednesday released the SNAP Restrictions Impact Analysis, which estimates the costs food retailers will face under proposed changes to SNAP. Prepared by Badger Metrics, the study found that the additional economic burden on food retailers will be roughly 1.9% of 2024 net income.
The study said that the total up-front cost from SNAP restrictions is projected to be:
- $1 billion for convenience stores
- $305.1 million for supermarkets
- $11.8 million for small-format stores
- $215.5 million for supercenters
In addition, the report calculated that ongoing annual costs of maintaining compliance are estimated at $378.6 million for convenience stores, $281.4 million for supermarkets, $18 million for small-format grocery stores and $81.1 million for supercenters, totaling nearly $759.1 million per year.
“These new restrictions are unprecedented,” Margaret Mannion, director of government relations at Arlington, Virginia-based NACS, said. “Without clear rules and the time to implement them, they will impose significant costs on all American consumers, not just SNAP participants.”
According to the study, these costs derive from technology, software and point-of-sale (POS) upgrades, as well as the labor required to comply with new stocking, replenishment and labeling requirements.
“Food retailers and convenience stores are committed to supporting efforts to improve the nation’s health, but the proposed restrictions represent significant new costs and operational challenges,” the associations said in a joint statement. “Without clear guidance and adequate time, these well-intended changes will create unexpected difficulties of both retailers and the customers they serve.”
Given the scale and complexity of these changes, NACS, Washington-based NGA and Arlington, Virginia-based FMI are asking the U.S. Department of Agriculture (USDA) to:
- Extend the timeline for implementing SNAP restrictions to allow retailers, especially independent and small retailers, to take adequate time to adapt systems and processes.
- Provide clear and actionable definitions of restricted foods to ensure that all retailers can comply with new regulations and waivers without ambiguity.
Shutdown
SNAP is funded by the USDA. As of Wednesday’s government shutdown, the official website of the USDA—along with many other government agency websites—posted the following:
“Due to the Radical Left Democrat shutdown, this government website will not be updated during the funding lapse. President Trump has made it clear he wants to keep the government open and support those who feed, fuel, and clothe the American people.”
Congressman Brad Sherman (D-California) posted on his website on Tuesday that “in the case of a prolonged shutdown ... SNAP benefits may also be affected.”
SNAP recipients should have already received their October payments, according to a Nasdaq report, citing the Food Research & Action Center (FRAC). The USDA provides a given month’s SNAP benefits to each individual state’s electronic benefit transfer (EBT) vendor the month prior to disbursal. Funds for October’s SNAP benefits were already sent out by the USDA in mid-September, before the government shutdown.
But if the shutdown continues beyond mid-October when the USDA would typically disburse payments to each state’s EBT vendor for the following month, it is not clear when or how November SNAP benefits will be paid, FRAC said. USDA could tap its contingency reserve funding to cover SNAP costs, said FRAC. Under the Biden administration, that reserve amounted to $6 billion; however, public information about its current amount is not available, nor is it known whether the Trump administration would opt to use it to continue disbursing SNAP benefits.
FRAC also said that if the USDA fails to instruct states to transmit their electronic files on time, November SNAP benefits could be delayed or interrupted entirely. Each state operates on its own processing schedule. If a state misses its deadline, “delays are almost inevitable,” FRAC said.
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