How the expiration of SNAP benefits could affect consumers and retailers

Nearly 42 million Americans are days away from missing their monthly food stamp check as the government shutdown enters its 28th day.

The Trump administration said money for the Supplemental Nutrition Assistance Program, or SNAP, will not be distributed if the federal government remains closed on November 1. With little movement toward a resolution on Capitol Hill, Congress appears poised to pass that deadline.

The end of aid will have a devastating impact on millions of families already struggling to afford food, and force people across the country to seek help from food banks. This decline in this spending will have a ripple effect on the economy, from small grocery stores to huge chains such as… Walmart And even retailers who sell discretionary merchandise.

There will be an “immediate impact on purchasing mix” toward lower profit margins at grocery and household staples, and the potential for more thefts as food budgets dry up, Wolf Research analyst Spencer Hanus wrote in a note to investors on Monday. Consumer confidence among lower-income Americans may also be affected as the holiday season approaches, Hanus said.

SNAP beneficiaries received an average of about $187 per month in fiscal year 2024, according to government data. Of these recipients, 73% live below the poverty line, which currently stands at $32,150 or less for a family of four.

After years of high food inflation and other recent hits to the amount of government benefits, losing that aid would be a huge blow to many low-income Americans.

Consumers who use SNAP benefits to pay for groceries spend more and shop more than other shoppers, according to data from Numerator.

On average, a SNAP recipient spends $832 a month on groceries, 20% more than non-SNAP shoppers, although the amount spent on each outing is on average 12% less, or about $20.80 per outing, the market research firm said. SNAP shoppers visit 6.6 more retailers per month, compared to 6.1 for people not receiving assistance, according to Numerator.

Hanus said his company is seeing an increase in interest in Google searches for “food banks” and “food stamps” as SNAP recipients look for alternatives. While there’s often a spike in interest in these terms around Thanksgiving, he said, “it goes up significantly year over year, which means this consumer is feeling the pinch here.”

The potential loss of aid from the shutdown is the second-last blow to government food assistance programs for low-income Americans. The One Big Beautiful Act legislation passed by Republicans this year cuts SNAP benefits by an estimated 20%.

Hanus estimates that the bill’s spending changes equate to a 1.5% to 2% decline in retail industry sales.

While there are different ways to look at how the expiration of SNAP benefits will impact retailers, grocery stores are likely to take a hit. The effects can reach employees.

“Often, staffing and inventory at grocery stores are planned around benefit cycles, so a lapse may result in reduced employee hours, perishable food losses, and decreased sales,” the National Grocers Association, an industry group, said in a statement. “Furthermore, when benefits are restored, the resulting increase in demand could strain supply chains across the country.”

Walmart’s numerator data shows, Dollar General and Dollar tree They are more likely to meet the needs of SNAP shoppers, whereas goal, Costco and AmazonOwned by Whole Foods is less likely. Hanus estimates that a high-single-digit percentage of Walmart’s sales are SNAP-related, while Dollar General and Dollar Tree are in the mid-single digits.

But SNAP users spend the most annually on groceries at Walmart, next to… Kroger And Costco, according to the numerator.

Walmart is the nation’s largest retailer and largest grocer. Numerator also found that it captures significantly more SNAP spending on groceries than competitors. More than 94% of SNAP shoppers bought food there in the past year, with an average annual spending of $2,653, or 26% of the group’s annual grocery spending.

Just under half, or 48.8%, of all SNAP recipients shopped at Kroger in the past year, spending an average of $1,687.67 annually, or 8.6% of the group’s total annual grocery spending.

Although it requires a membership to shop, Costco ranks third as SNAP users buy groceries with an average annual spending of $1,482.98. Walmart-owned membership club Sam’s Club ranks fourth for share of spending at 3.8% and offers discounted memberships to new members who verify participation in the government assistance plan.

Walmart referred CNBC to the National Retail Federation, which said cutting food aid funding “creates a crisis for millions of American families.” Albertson referred CNBC to the Food Industry Association, which called on Congress to reopen the government and “ensure that these vital programs remain reliable for those who have to rely on them to get through a difficult time.”

Costco declined to comment. Kroger, Dollar General, Dollar Tree, Amazon and Whole Foods did not immediately respond to requests for comment.

Overall, 3.6% of in-store grocery trips in the U.S. were paid for using the government’s SNAP or women, infant and child benefits in 2025 through September, a decline from 3.9% in 2024, according to Numerator. This share is down from the pandemic peak of 6.5% in November 2021, when there was an additional emergency allocation.

However, more grocery trips are funded with SNAP benefits now than before the pandemic, when between 2.2% and 2.8% of groceries were purchased under the program in all months between February 2019 and February 2020.

If SNAP funding expires, recipients may buy fewer other goods as well.

“The decline in dollars in consumers’ portfolios forces a reallocation of discretionary dollars toward food and more tepid spending overall,” Edward Kelly, an equity analyst at Wells Fargo, said in a note to investors last week. He noted that retailers that reported earnings in November may say they saw weaker discretionary spending during that month due to the expiration of food aid.

Although there has never been a time when the federal government never came up with a contingency plan to fund SNAP during shutdowns, states have begun to intervene. New York Governor Kathy Hochul is working to provide $30 million in aid to affected New Yorkers.

Additionally, lost SNAP benefits must be paid in arrears once the government reopens — although it is unknown when that will be.

“We expect an eventual resolution to the government shutdown, which could mean a windfall for low-income consumers in the peak shopping season as missed payments are made up,” Kelly said.