Dive Brief:
- U.S. grocers and other food retailers have felt the impact of high unemployment and lower wages in recent years as consumers shied away from upscale items, and the federal government's cuts to the Supplemental Nutrition Assistance Program aren't about to make things any easier.
- The $78 billion-a-year food stamp program received a $5-billion (about 6%) cut Friday, and the move is expected to be particularly painful for Wal-Mart, dollar stores and grocers who cater to lower-income consumers.
- One in five American households (around 48 million Americans, or 15% of the country) is on food stamps, receiving an average of $133 a month, and while cuts will vary based on factors like household income, the U.S. Department of Agriculture estimates that a family of four will lose about $36 a month.
Dive Insight:
The cuts to SNAP are certainly bad news for food retailers, and could prove even worse for the holiday season as a whole. While damage to the economy as a whole is estimated to be small, the blow to consumer confidence could be significant.
