Some retailers could face slower sales if the ongoing government shutdown disrupts the Supplemental Nutrition Assistance Program (SNAP), which provides food benefits to roughly 42 million Americans, according to a CNBC report. Recipients of the government program receive an average of about $187 per month.
Wolfe Research analyst Spencer Hanus said a funding lapse could shift consumer purchasing toward lower-margin grocery and household staples while increasing the potential for theft as food budgets tighten. He also noted that lower-income consumer confidence could take a hit heading into the holiday season.
Retailers most likely to cater to SNAP shoppers include Walmart, Dollar General and Dollar Tree, according to data from Numerator. Target, Costco and Whole Foods are less dependent on SNAP spending. Numerator data show that SNAP users spend the most on groceries at Walmart, Kroger and Costco.
In fact, more than 94% of SNAP shoppers have purchased food at Walmart in the past year, with an average annual spend of $2,653, representing 26% of the group’s grocery spending. Nearly 49% shopped at Kroger, spending an average of $1,688 annually, or 8.6% of the cohort’s total grocery spend. Despite its membership requirement, Costco ranks third, with SNAP users spending an average of $1,483 per year there.
SNAP, along with Women, Infants, and Children (WIC) benefits, accounted for 3.6% of in-store grocery sales through September, down from 3.9% in 2024, according to Numerator. SNAP use peaked in November 2021 at 6.5% during the pandemic, but remains above pre-pandemic levels, when between 2.2% and 2.8% of groceries were purchased each month from February 2019 to February 2020.
If SNAP funding expires, recipients may also cut back on non-food purchases.
“Fewer dollars in consumers’ wallets force a reallocation of discretionary dollars toward food and more tepid spending overall,” said Wells Fargo equity analyst Edward Kelly in a note to investors. He added that retailers reporting earnings in November may cite weaker discretionary spending due to the potential expiration of food assistance.
The National Grocers Association warned that grocers could see reduced employee hours, food waste from perishable losses, and declining sales if benefits lapse. When funding is restored, the association said, a surge in demand could strain supply chains as households restock.
For now, some states, including New York, Virginia, Louisiana and Maryland have declared emergencies to avoid disruptions to SNAP benefits. Assuming no last-minute deal to end the government shutdown, the Federal Government will not administer SNAP benefits in November. So it could be up to the states to carry the workload for some time.
Source: “Retailers Brace for SNAP Disruption as Government Shutdown Continues”
