SNAP, or the supplemental nutrition assistance program, replaced Food Stamps in recent years. This program is a government-sponsored plan to help low-income households with shopping and food costs. The SNAP program works via an Electronic Benefits Transfer card that the consumer presents during payment. The retailer is then reimbursed for the amount used by the government. In the past few years, the number of SNAP users has grown significantly, and the program was valued to cost as much as $125 billion in 2021, and one in four CPG dollars is typically subsidized by SNAP.
There are a lot of negative connotations about shoppers who use the SNAP program. Many retailers are dismissive of SNAP. But for independent retailers, the SNAP program may be a great way to boost sales. Here are a few reasons why.
- 28% of SNAP households live in urban areas. For smaller retailers who serve local neighborhoods, expanding the use of SNAP in your store can be a great way to bring in more customers. Many SNAP users live in urban areas without readily available access to big box stores, so they rely on independent, nearby retailers instead.
- Smaller regional retailers are the most popular among SNAP households. Data shows that SNAP users value regional grocers and stores over big box stores, especially if they offer everyday low pricing (EDLP).
- SNAP users value digital tools. The USDA found that 4 million SNAP households shop online. Yet out of the 250 000 physical stores across the country that accept SNAP payment, only some offer digital SNAP acceptance. Smaller retailers who are willing to scale up and add SNAP to their digital shopping offerings may capture more market share and boost their online shopping numbers.
The SNAP program makes groceries and essential goods more affordable for Americans. Retailers that recognize how important this program is to low-income households may inspire store loyalty. By accepting SNAP benefits, offering digital SNAP acceptance, and then catering your pricing strategy to provide value, you can bring in more customers who utilize this program.
At UNFI professional services, our retail pricing team can offer our expert help to help your store coordinate your pricing strategy. We offer price management, pricing and time data tool, shelf labels, and more. We can help your store develop an effective pricing strategy to cater to your desired shopper demographics, including SNAP users. Using our tools, your store can compete in your local market.
We know that implementing the SNAP program in your store may be intimidating, but it can be worth it. This is a vital program that helps many people get the essential goods they need, and your store can help facilitate it with our help.