In the wake of cuts to the Supplemental Nutrition Assistance Program (SNAP), also known as food stamp assistance, recipients of the aid have increased their spending at quick-service restaurants (QSRs), according to a new study.
SNAP payments were raised during the pandemic but allowed to lapse in March. New data from the Chicago-based research firm Circana shows that about a third (35%) of the discontinued aid was formerly used for food and beverage purchases from supermarkets. The reduction in SNAP meal subsidies amounted to about $23 billion.
Yet recipients cut their purchases of nonfood items with SNAP funds by three times as much, according to Circana. Simultaneously, grocery inflation outpaced the rise in menu prices, narrowing the gap between the costs of home-cooked and restaurant meals. The deals offered through restaurant loyalty programs also helped in bringing down the cost of meals prepared outside the home.
As a result, the research company found, SNAP recipients stepped up their visits to fast-food restaurants appreciatively. With less aid money to buy groceries, program participants had to dig deeper into their own resources to buy food, and restaurant meals were almost as economical as cooking.
Pizzerias snagged the biggest part of the increase, while hamburger places captured 18% of the traffic and expenditures of SNAP participants, Circana said. Checks for SNAP recipients averaged $8 at pizza places and $6.56 at a burger restaurant.
“Over the coming months, SNAP households may reduce their discretionary spending more than they have to date to free up dollars for food and beverage purchases,” Alastair Steel, a client engagement executive at Circana, said. “The SNAP benefits cuts are still likely to impact food and beverage spending for these consumers in the months ahead.”
This story originally appeared onRestaurant Business Online.
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