Wal-Mart to Widows Will Feel U.S. Food Stamp Cuts
By Derek Wallbank & Alan Bjerga - Nov 1, 2013 1:48 PM ET
Luke Sharrett/The New York Times via Redux
“I don’t bother them or worry them with adult issues or adult problems,” Crist, a 30-year-old self-employed babysitter in Lancaster, Ohio, southeast of Columbus, said in a telephone interview. “But if they ask me, ‘Well, why can’t we get this? We always get this,’ how am I going to explain that?”
Food-stamp spending reached a record $78.4 billion in the fiscal year that ended Sept. 30, due in part to a temporary boost in benefits passed as part of the 2009 economic stimulus that expires today. Lawmakers battling over U.S. farm and budget policy are looking to cut deeper by tightening eligibility rules that could drop as many as 3 million people from the program.
With an estimated 8 percent of shoppers using food stamps, the impact will probably be felt most acutely by discount retailers such as Dollar General Corp. (DG), Family Dollar Stores Inc. (FDO) and Wal-Mart, said Bryan Gildenberg, chief knowledge officer of Kantar Retail.
“You’ll find the effects will happen quite quickly,” Gildenberg said. “These are shoppers that have probably already allocated their spending down to the dollar.”
Few ExtrasCrist said her budget leaves little room for extras. The $547 a month she received in food benefits for herself and her daughters, ages 13 and 8, will become $497 today, as a roughly 5 percent benefit cut takes effect nationwide. With utilities and other expenses, she said she will be spending less on fresh meats, fruits and vegetables at the grocery store.
Grocers say they’re watching the situation closely. “We’re a little concerned about the food stamp cut, I can tell you that,” Dennis Eidson, president and chief executive officer of Spartan Stores Inc. (SPTN), a Grand Rapids, Michigan-based grocer, said on a conference call Oct. 24. “That could be a meaningful event for us.”
Kroger, the biggest U.S. grocery chain, said it doesn’t expect the food-stamp drop to affect its sales. “Customers may shift to spending more of their cash on food and less cash on other things,” Keith Dailey, a spokesman for the Cincinnati-based company, said in an e-mail.
SNAP EnrollmentMonthly enrollment for what’s officially called the Supplemental Nutrition Assistance Program peaked last December at 47.8 million. It was 47.6 million in July, according to the most-recent data from the U.S. Department of Agriculture. That’s up from 28.2 million five years ago, when the program’s annual cost was $37.6 billion. Today’s reduction in aid is equal to the amount donated to churches, synagogues and private food banks, according to a study by Washington-based anti-hunger advocate Bread for the World.
“All retailers who sell food are likely to feel the impact of cuts, since people receiving assistance often don’t have excess income to make up the difference,” said Jennifer Bartashus, senior analyst for food retailing for Bloomberg Industries.