SNAP food aid cut will also impact small grocery stores : NPR

Store manager Jose Pajares says he’s cutting prices and stocking less food since business has slowed at Save A Lot in Springfield, Massachusetts. The bulk of their customers rely on SNAP benefits, and the store depends on their business. A lack of funding would hurt everyone.

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SPRINGFIELD, Mass. — Theresa Rios came to the grocery store this week with a shorter shopping list than usual. And she also pays even more attention than usual to the price.

Passing a shelf of items labeled “Real Bacon Bits” next to packages of imitation bacon bits, Rios doesn’t hesitate. “This costs $2.19 and this one costs $1.59,” she said, “so I’m going to buy this.”

Rios is a regular at the Save A Lot store in Springfield. But since learning that her federal food aid may soon be cut, she’s been trying to set aside some of the money she receives, just in case. And she no longer dedicates all of her business to Save A Lot.

“I’m at the point where I’m shopping at three different stores,” she says. “So I’ll come here because it’s cheaper than Stop & Shop, but some items at Price Rite are cheaper than here, and Walmart is [cheaper for] cleaning stuff…I’m just shopping.

As many worry about a possible reduction in SNAP food assistance, Theresa Rios is cutting back on spending and doing more of her shopping at retail giants like Walmart in hopes of saving money. Some small grocery stores in low-income communities are already seeing sales plummet and are bracing for the situation to get worse.

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Rios says she’s also giving up some foods altogether, as she’s switched to new, less expensive meals for herself and her three young grandchildren, whom she cares for full time. Dinner is reduced to rice and beans, and she no longer buys the children’s favorite cereal.

“They will have to make do with what I can give them,” she said.

Rios isn’t the only buyer forced to be more frugal. Some 42 million Americans rely on Supplemental Nutrition Assistance Program benefits, formerly known as food stamps, and with many of them worried about losing their food assistance, some grocery stores are also growing worried. There are 250,000 retailers authorized to accept SNAP benefits. Most would be able to absorb any loss that might result from a SNAP failure, but others, like Springfield Save A Lot, are more vulnerable. SNAP purchases at this store account for 65% of sales.

Already, manager Jose Pajares says these sales have started to dry up.

“It’s scary,” he said. “I see fewer clients every day because they are afraid to spend all the money they have for the entire month.”

As a result, Pajares says he is ordering less inventory for the store and lowering prices to try to increase sales. But he still ends up with meat and produce languishing on the shelves until their expiration date.

“If we don’t sell, we have to throw it away,” he says. “Every day we throw things away.”

The front door of the Save A Lot grocery store in Springfield, Massachusetts, has a sign indicating that the store accepts benefits from the Special Supplemental Nutrition Program for Women, Infants and Children, also known as WIC.

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Even in the best of times, grocery store profit margins are slim — usually just a penny or two on the dollar. And recent difficulties with tariffs, for example, have reduced profits even further.

Anthony Peña, owner of this store, also owns a few others that rely less on SNAP activity. That means he’s able to ride out a decline in sales for a while, he says, but not for long.

“After a month, maybe two, I will start thinking about nuclear options, as we call it, and I will have to think about closing the store,” Peña says.

“For small supermarket grocers, challenges like SNAP discounts can have a significant impact on profitability, which unfortunately can put some stores and many jobs at risk,” says Scott Moses, an investment banker at Solomon Partners who wrote the book. A “grocery store” Christmas carol about the rapid and seismic changes in the grocery industry.

He says a prolonged shutdown of SNAP could lead to increased pressure on the already dwindling number of small, independent supermarkets, which are being squeezed by grocery giants like Walmart. Walmart alone has almost as much market share as all of the country’s 26,000 small supermarkets combined.

Now, Moses says, Walmart could well earn even more; If there were a reduction in SNAP benefits, he says the supermarket would likely attract more new customers.

“A significant number of customers are going to shift to what they perceive as cheaper carriers, and net, net, Walmart will probably come out on top,” Moses said.

However, for less fortunate stores, there is growing concern that any closure could have significant and serious repercussions.

“There’s going to be a ripple effect that’s going to happen here,” says Jérôme Bouyer, vice president of retail operations at Save A Lot. For starters, Save A Lot stores tend to be “in places that are already ‘food deserts’ and experiencing food insecurity.” This only makes the problem worse.

There are also concerns about the impact on local sellers, suppliers and distributors.

“For example, the bread seller or the one who delivers eggs or milk to the store,” Peña explains. “Instead of delivering 100 units, it will now deliver 25, which is 75 units less. This is where things get a little complicated.”

Cashier Stephanie Hernández is bracing for what could be a double whammy. If SNAP food assistance is cut off, Save A Lot’s business could collapse and she could be fired. But she’s also a SNAP recipient herself, so she could end up losing her food assistance as well as her job.

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And of course, store employees are keenly aware that their jobs are also on the line. Already, there are cashiers standing around during what is supposed to be the busiest shopping hour of the day.

“I’m worried because if customers don’t come because they don’t get food stamps, our jobs are in danger,” cashier Stephanie Hernández said in Spanish. She has an 11-year-old child and 1-year-old twins. “If I don’t work,” she said, “how will I pay my bills?”

If the worst-case scenario comes true, it would be a double whammy for Hernández. She receives SNAP benefits herself. So if the payments expire, she could end up losing her food assistance – and her job.