Preparing for Changes in SNAP Policy: How Grocers Can Adapt
As grocers prepare for upcoming changes in federal policy and state waivers affecting SNAP benefits, Coresight Research suggests that making adjustments to product assortments could help them navigate the shifting landscape.
Currently, 12 states have received approval from the USDA to implement restrictions on certain items like candy and soda, which will impact SNAP eligibility. While these changes are set to take effect next year, grocers are already facing challenges in terms of operational adjustments and compliance. Each state will have its own set of restrictions to enforce.
With these policy changes, grocers, particularly those in low-income and rural areas, may experience decreased basket sizes and foot traffic, according to Coresight. The impact of these changes will vary among retailers, with larger chains like Walmart and Kroger facing moderate challenges, while smaller grocers and dollar stores catering to SNAP consumers may need to make more significant adjustments to accommodate shifting spending habits.
Health-focused retailers, on the other hand, are expected to weather the changes more smoothly, as their product selections already align with SNAP-compliant items. Retailers like Sprouts Farmers Market, with a strong focus on health and wellness, are likely to experience minimal disruption due to their existing product offerings.
Coresight predicts that these policy changes will encourage consumers to seek out healthier options but could also lead to a decrease in discretionary spending or a shift towards more affordable alternatives. The impact of the state waivers is expected to be felt most significantly in grocers’ center store categories.
To adapt to these changes, Coresight recommends that retailers with high SNAP volume stores consider repositioning or replacing items that will no longer be eligible for benefits with alternatives that are eligible. Highlighting these alternatives prominently in-store can help guide consumers towards healthier choices. Private label products, particularly for essential items like bread, dairy, and protein, can also play a key role in addressing affordability concerns.
Major retailers like Target and Walgreens have already begun expanding their private label offerings to cater to health-conscious consumers. Coresight suggests that leveraging private label lines can help retailers steer SNAP consumers towards healthier options while also improving profit margins. Additionally, offering smaller pack sizes and more affordable options can help SNAP consumers make the most of their benefits.
In terms of promotions and loyalty programs, Coresight recommends that retailers consider increasing promotions on staple items and restructuring loyalty programs to reward customers who purchase essential items over discretionary items. In-store signage, community outreach, and employee training on SNAP-eligible items can also help shoppers adapt to the changes more effectively.
As these policy changes roll out, it’s essential for grocers to communicate effectively with SNAP recipients to avoid any potential frustrations at checkout. By proactively adjusting their assortments and strategies, grocers can better serve their communities and meet the evolving needs of SNAP consumers.