The potential lapse of federal food assistance benefits, commonly known as SNAP (Supplemental Nutrition Assistance Program) on November 1st threatens to reshape the retail landscape for grocery stores in the U.S. As the current government shutdown pushes into its second month, grocers from Walmart to regional chains are bracing for the chance of a significant drop in sales in November if federal food aid programs are not renewed.
SNAP provides crucial support to nearly 42 million Americans. Its funds, totaling about $8 billion monthly, directly translate into grocery spending. Walmart, in particular, captures about 24% of all SNAP-related grocery purchases, dwarfing the shares of other major retailers like Kroger or Costco. Neil Saunders, managing director at GlobalData, explained that if SNAP payments fail to go out, the spending power of low-income families would be immediately cut, highlighting Walmart as the retailer most exposed to this risk.
The business disruption from the lapse goes beyond just sales figures at the checkout. Suppliers face uncertainties as demand softens, resulting in reduced orders, and workers may see reduced hours or layoffs. Marion Nestle, a professor emerita at New York University who specializes in health and nutrition, remarked, “It’s not just low-income individuals relying on SNAP who will face consequences. The businesses where they typically spend will also lose out.”
This ripple effect could be severe. Some smaller grocery stores, particularly those serving lower-income areas, are vulnerable enough that the suspension of aid might threaten their viability. Local vendors, such as bread or dairy distributors, also stand to experience cutbacks on deliveries. At the worker level, cashiers and stock clerks feel the strain directly; reduced customer traffic driven by SNAP interruptions jeopardizes their jobs and income stability. One cashier shared her concerns about losing work hours, underscoring the direct human side of the SNAP hiatus.
Experts observe that while SNAP benefits historically get reinstated after shutdowns, the intermittent pauses create unpredictable sales patterns. A dip during the lapse is often followed by a later rebound once payments resume, but the interim period can be financially destabilizing. Robert Moskow, a retail analyst at TD Cowen, estimated that a 15% drop in grocery purchases by SNAP recipients could reduce total food sales by nearly 2%, a notable contraction in an already competitive market.
Retailers are not only managing anticipated revenue declines but also facing operational challenges, such as the risk of increased food waste. Perishable products that do not sell timely can generate losses that erode profit margins. Rob Karr, CEO of the Illinois Merchants, pointed to the difficulty retailers will face balancing costs and inventory in this uncertain environment.
Amid the current uncertainty, some social media rumors have particularly focused on Walmart, with unfounded speculation about store closures due to the SNAP funding lapse. Walmart has publicly denied these claims, affirming its stores will remain open despite the anticipated sales impacts.
Federal officials and trade groups are urging Congress to resolve the impasse to avoid deeper economic damage. The political stalemate leaves grocers and their extended supply chains awaiting clarity amid the prolonged shutdown.
Ultimately, the lapse in SNAP funding does more than reduce grocery sales figures, it threatens livelihoods, stretches supply chains, and challenges the resilience of communities that depend on affordable food access. The coming weeks will reveal the broader business and social consequences of this funding gap, underscoring the critical link between government policy and daily economic realities in the U.S. grocery sector.Â
