A $61 billion business for Walmart, Target, Kroger, and other major retailers could take a critical hit from Trump

Hayley Peterson

Dec 5, 2019, 00:28 IST

A $61 billion business for Walmart, Target, Kroger, and other major retailers could take a critical hit from Trump

A change to the federally funded food-stamp program could impact major retailers.

The Trump administration is making it harder for some people to qualify for government aid known as food-stamp benefits.
The change could cut hundreds of thousands of people from the aid program, delivering a blow to retailers that collect billions of dollars every year from food-stamp spending.
Last year, Americans redeemed about $61 billion in Supplemental Nutrition Assistance Program (SNAP) benefits, according to the USDA. More than half of that total, or about $33 billion, was spent at big-box stores such as Walmart and Target.
Another $18 billion in SNAP benefits was spent last year at supermarkets like Kroger, Giant, and Food Lion.
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The Trump administration said Wednesday that it is tightening work requirements for recipients of food-stamp benefits in a move that could end the government aid for as many as 755,000 people.

The change could deliver a blow to Walmart, Target, Kroger, dollar stores, and many other retailers that depend on billions of dollars in food-stamp spending every year.

Food stamps, also known as Supplemental Nutrition Assistance Program (SNAP) benefits, help low-income families pay for food. The federally funded program loads monthly benefits onto cards, which can be used like debit cards at retailers.

Last year, Americans redeemed about $61 billion in SNAP benefits, according to the USDA. More than half of that total, or about $33 billion, was spent at big-box stores such as Walmart and Target.

Walmart, alone, is estimated to account for about 18% of annual food-stamp spending, or about one-third ($11 billion) of total SNAP spending in big-box stores. Walmart and Target did not respond to requests for comment on the changes.

Another $18 billion in SNAP benefits was spent last year at supermarkets like Kroger, Giant, and Food Lion. Dollar stores such as Family Dollar and Dollar General are also impacted by SNAP-benefit spending.

The change that the Trump administration announced Wednesday makes it harder for able-bodied adults without dependents to receive SNAP benefits for longer than three months out of a 36-month period, unless they are working.

The USDA estimated in a regulatory-impact analysis published in February that the rule would result in 755,000 people losing their SNAP benefits in 2020.

US Secretary of Agriculture Sonny Perdue said the change would encourage more people to work.

"We need to encourage people by giving them a helping hand but not allowing it to become an indefinitely giving hand," Perdue said in a statement on Wednesday. "Now, in the midst of the strongest economy in a generation, we need everyone who can work, to work. This rule lays the groundwork for the expectation that able-bodied Americans re-enter the workforce where there are currently more job openings than people to fill them."

The new rule, which will take effect in April, is one of three measures that the Trump administration is considering that would shrink the SNAP program.

All three measures together are projected to cut about 3.7 million people from the SNAP program, according to an analysis last month by The Urban Institute. The SNAP program currently serves more than 36 million people.

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