SNAP cuts or delays are bad news for Walmart and other retailers
Supplemental Nutrition Assistance Program (SNAP) benefits for November are currently in limbo due to the government shutdown, which will likely impact both SNAP recipients and the grocery or big-box stores where they shop.
It’s still unclear when SNAP recipients will receive their full SNAP payments for November, according to CNN, which reported that this depends on the approval of a short-term spending package to temporarily fund federal agencies, which will still need to go through Congress and President Trump. Some states have distributed payments to at least some of their residents, though the Trump administration demanded that states “undo” such payments.
On Friday, the Supreme Court temporarily paused a federal judge’s order that directed the Trump administration to pay full SNAP benefits to all 42 million recipients for November by the end of the day, CNBC reported.
About 12% of U.S. residents received SNAP benefits in fiscal year 2024, according to the USDA. The maximum allotment for a single person in the contiguous U.S. is $298 per month for fiscal year 2026 (which began in October), according to the USDA. A good portion of SNAP funds go to Walmart, according to third-party data, so any cuts or delays to the program could show up in the retailer’s fourth-quarter results. This is on top of an already challenging consumer environment, with consumers worried about rising prices and inflation and the government shutdown leaving hundreds of thousands of federal workers without paychecks.
“One of the problems here has been the uncertainty — the on-again, off-again. Is [SNAP funding] going to be released? Is it not going to be released?” George Davis, professor of agricultural and applied economics at Virginia Tech, told Modern Retail. A USDA official said it could take weeks or months to release money to recipients. “People with lower income don’t have the resources to absorb that type of shock,” Davis said.
In the third quarter, 56% of shoppers who reported that they receive SNAP benefits said they used them at Walmart within the past three months, according to Kantar research. A Walmart spokesperson declined to comment for this story, given that the company is in a quiet period prior to its third-quarter earnings release.
The second-most frequented grocer with SNAP shoppers was Kroger (26%), followed by Albertsons (25%), Amazon (23%), Dollar General (22%) and Target (22%).
“Of all the benefit programs, this is the one that is the most accretive, the most positive to the economy, to the retail landscape,” said Julie Craig, vp of shopper insights for Kantar. “It’s something that can be a positive stimulant in the economy, so the longer the situation goes unresolved, the more significant the hit, from the retail perspective.”
Greg Ferrara, president and CEO of the National Grocers Association, said in a statement on Nov. 1 that disruptions to SNAP funding may lead to reduced employee hours, perishable food losses and sales declines for grocers. The organization urged Congress to quickly end the shutdown and restore funding for SNAP.
“Local grocers participate in SNAP because they believe that no American should go hungry and are committed to serving their neighbors and community members in need,” Ferrara said. “Independent grocers are often the only source of fresh produce, dairy and other nutritious essentials for millions of families, veterans and seniors who rely on federal nutrition assistance to make ends meet.”
SNAP shoppers are more likely than other grocery shoppers to shop at stores with the lowest prices, switch to lower-price alternatives, compare prices and stop buying some grocery products in the third quarter, according to Kantar research.
“They are already aggressively employing all the strategies they can,” Craig said. “There’s not a lot more they can do to really manage their spending when they’re hit with a lack of SNAP benefits.”
Seventy percent of SNAP recipients said in the third quarter — before the cuts or delays took effect — that they already frequently worried they could not afford to feed their families, up from 58% in the second quarter of 2023, the last quarter of data Kantar has available on SNAP.
Losing SNAP payments could escalate these families’ situations further, leading to devastating outcomes. While it is a supplemental program, Davis said many rely on it as their main source of income.
“In these situations, parents will [often] focus on feeding their children first, and then they may go hungry themselves,” Davis said. “And they will buy cheaper goods, lower quality, if they can afford it.”
Craig said on Nov. 6 she expected any delay in payments beyond the next two to three days to hit retailers and show in fourth-quarter earnings releases for grocers and retailers with a large share of grocery sales.
Grocers “are hoping this will be short, as well, so they probably aren’t going to lay off people or change purchases,” Davis said. “But the further it gets extended, the more they have to start thinking about more extensive measures.”