Regional and ethnic grocery stores are winning SNAP household trips because of their lower price increases.
Numerator, a data and tech company serving the market research space, has recently released its latest report “Helping SNAP Consumers During Economic Headwinds,” which examines the full impact of the Supplemental Nutrition Assistance Program (SNAP) on modern consumers through the analysis of verified purchases by SNAP recipients. The report allows retailers and brands to better understand their omnichannel purchasing and get a detailed view into SNAP-specific trips.
Chicago-based Numerator found that SNAP consumers account for nearly one-quarter (24%) of total CPG spend. Further, when they use their benefits during a shopping trip, it results in larger purchases. When basket size is $15 more, spend per trip on groceries is almost $18 more, and units per trip double, from 5.2 to 10.4.
In the latest quarter ending Dec. 31, 2022, compared with one year ago, SNAP consumers were paying 13% more per unit, compared with 11% more for non-SNAP consumers –driven by increased inflation on baby and health and beauty products that SNAP consumers overindex on, as well as in the dollar channel.
Numerator found that SNAP consumers vary their shopping locations. Compared with non-SNAP consumers, SNAP shoppers are 56% more likely to spend their CPG dollars at dollar stores, 24% more likely at convenience stores and 12% more likely at mass retailers.
Price-conscious SNAP consumers are also gravitating toward regional and ethnic grocers. Among the grocers growing trips with SNAP households are H-Mart (42% of projected trips), Market Basket (42%), Whole Foods Market (36%), 99 Ranch Market (35%) and Wegmans Food Markets Inc. (31%).
However, Numerator’s report found that more inclusive grocery delivery services are needed. Twenty percent of SNAP recipients said they wish that grocery delivery services made it easier to use their program benefits. Currently, 12.9% of SNAP consumers use Walmart+, followed by DoorDash DashPass (5%) and Albertsons Freshpass (4.3%).
Cost-saving strategies for SNAP recipients include pulling back on snacks. Units purchased per household are down significantly in categories like popcorn (23.6% versus year ago), meat snacks (18%), and snack seeds, nuts and trail mixes (15.9%). SNAP recipients are also trading down to private label. Although unit sales are down, Walmart, ALDI and Kirkland private labels are outperforming branded CPGs.
On the flip side, affordable luxuries like personal care items haven’t seen a pullback on spending. Categories such as toothbrushes (up 6.3% units per household versus year ago) and beer (up 4.6%) are growing with SNAP consumers.
With the phaseout of emergency additional benefits, grocers should explore strategies that help affected SNAP consumers’ dollars go further. For example, Meijer recently expanded its Flashfood program, making it the first retailer nationwide to accept SNAP benefits through the app that allows customers to purchase surplus close-dated food at a deep discount. The grocer is now accepting the payment capability at all of its Midwest supercenters and Meijer Grocery stores, a move that allows customers with SNAP benefits to pay for their Flashfood orders using an Electronic Benefits Transfer (EBT) card in the Flashfood app.
Other findings from Numerator’s report include the following: 61% of SNAP recipients are in the bottom 30th percentile in terms of purchasing power, 45% have children (compared with 28% of non-SNAP households), 29% have five-plus members in their household, and 37% are Gen Z or Millennial. Compared with non- SNAP households, SNAP households are twice as likely to be Black/African-American or Hispanic/Latino.
The “Helping SNAP During Economic Headwinds” report sources data from Numerator Insights (last 12 months ending Dec. 31, 2022) and a sentiment survey fielded Feb. 9-10 to 1,250 SNAP consumers. SNAP consumers are identified as making at least 12 or more trips using SNAP in the transaction within the past 12 months.