Making the Case for SNAP
This week, more than 200 food retailers, wholesalers and state association representatives are taking their stories to Capitol Hill and will address their commitment to the Supplemental Nutrition Assistance Program (SNAP). The grocery industry we proudly represent at the Food Marketing Institute and National Grocers Association is the linchpin to making the public-private partnership of SNAP a success.
Decades ago, the federal government tried its hand at distributing foods to assistance recipients, quickly realizing it lacked the capabilities to do so efficiently. Unlike the federal government, the food retail industry’s expertise is in mass food distribution, so a public-private partnership between these two sectors has created significant efficiencies and cost savings. As a result, today’s partnership between our retail members and SNAP has brought access to affordable and nutritious foods to our most needy neighbors.
Investing in the community
The supermarket industry is honored to serve as the distribution point for SNAP food benefits to millions of food-insecure households across the country. Grocers pride themselves on serving the communities in which their businesses operate and in providing personal service to each and every customer who enters their stores, including those who rely on the SNAP safety net.
Indeed, we consider SNAP to represent a significant area in which the supermarket industry invests specifically in the community it serves. Our open and competitive marketplace ensures year-round availability of fruits and vegetables, dairy, bread and protein in neighborhoods across the country. SNAP customers can select from a variety of safe, fresh and shelf-stable food products for purchase with a combination of their EBT (electronic benefits transfer) for SNAP-eligible items, cash, credit and other forms of tender based on the shopper’s basket. In fact, EBT represents between 4 percent and 6 percent of sales in food retail stores, according to a national survey. In that same survey, credit and debit accounted for 33 percent to 38 percent of all sales in food retail stores.
In an industry that averages less than 2 percent profit margin annually, those engaged in food retail must evaluate every investment, including their commitment to participate as a SNAP partner, to ensure that it’s backed by a clear business case. SNAP-authorized retailers invest significant resources to become eligible to participate in the program. Each authorized retailer must purchase its unique point-of-sale equipment and software, train associates and comply with strict retailer stocking and administrative requirements.
Notably, food retailers are also making capital investments to participate in the U.S. Department of Agriculture’s online SNAP pilot, given their desire to invest resources in emerging technologies that serve all of their customers. However, any additional fees, reporting mandates or other administrative costs will divert these resources and limit or destroy those investments.
As work continues to reauthorize SNAP in the next Farm Bill, it’s critical that Congress protect the foundation of our partnership and resist the urge to impose additional costs or cumbersome administrative mandates on retailers. To uphold the program’s efficiencies and keep costs down for all shoppers, we must maintain the current ban on interchange fees in SNAP, prohibit the imposition of any transaction-processing fees on retailers by state-contracted EBT processors, and oppose excessive reporting mandates or new fees.
The food retail industry feeds more than just families – it sustains SNAP as a respectful steward of the government program.