The Trump administration recently passed the spending bill. Some of the bill is new; some keeps in place existing programs. And where politicians exist, they do tricks and misinformation. Sometimes what they say is going to happen and what a bill actually does are two different things.
Let’s take a deep look at the Supplemental Nutrition Assistance Program known as SNAP. The federal government spends more than $100 billion a year on this program. It gives participants about $6 a day to spend on food. 
Only U.S. citizens can qualify (though a very small class of legal non-citizens could get benefits too, more on that below). The majority of SNAP recipients are elderly, disabled, children or working poor families.
The new bill calls for $186 billion in cuts over 10 years. That sounds like a lot, but let’s break down how legislators (creatively) got to these numbers:
- The first $37 billion comes from eliminating the possibility of future increases. Although the bill doesn’t cut the benefit to poor Americans and still allows for increase indexed to inflation, it “saves” $37 billion from increases that a future administration might put into place (as happened during the COVID-19 pandemic).
Impact to grocery stores: None. These cuts are against a future event that is unlikely to happen.
- The second block of cuts is adding additional work requirements to qualify for SNAP. There are already work requirements for non-disabled adults up to age 54, but the new program puts them in for adults 55-64, and for families whose youngest child is at least 14. They are counting $68 billion in savings here over 10 years, assuming that some percentage of older Americans will drop off SNAP. Note: It doesn’t actually cut benefit amounts, or cut out classes of individuals, it just says they have to work at least 20 hours a week to still qualify.
Impact to grocery stores: Both negative and positive. If large numbers of people who used to be on SNAP fall off the program, the impact could be negative to grocers. But it also provides an incentive for retirees to take part-time jobs to maintain their benefits. Senior workers are great for grocery, and they were the single largest group who left the workforce during COVID.
- The new bill counts $17 billion in additional savings by closing internet and energy subsidy credits. Without getting too complicated, the Affordable Connectivity Program allowed low-income Americans to still qualify for SNAP, even if their income was slightly too high, by allowing them to show their income net of energy and internet access fees. Removing this subsidy means fewer families will qualify for SNAP since their income would no longer meet the requirements. Note: This budget change targets working families who are still low-income and can’t make ends meet but are just above the threshold for food subsidies. There are a lot of double-income enlisted military families with children in this group.
Impact to the grocery industry: Fewer families will qualify. No silver lining here – this one will hurt the industry, especially in communities with a large number of active-duty military.
- The next block of savings will come from requiring states to cut error rates in SNAP administration. Error rates are not fraud, but true administrative sloppiness in the teams at the state level who run local SNAP programs. If the states’ work becomes more accurate, the cuts are less severe, but Congress expects this will save $40 billion over 10 years. Error rates are administrative failures. In some instances, families aren’t getting the benefits they actually qualify for; in others they are getting more than they should. This could be because new children come into the family or older ones age out; issues with separated or divorced families, etc. The potential savings here are likely overestimated, but connecting rewards to administrative discipline is likely a good thing in the long run. Note: States could choose to opt out of this. While unlikely, it could mean state-by-state variance in SNAP benefits and is worth exploring a little more in depth. (See below)
Impact to grocery stores: Likely little at the start, but over time expect that a modest number of consumers will roll off the program. The impact will vary by state.
- Another “get your house in order” part of the changes in SNAP is asking the states to share a larger percentage of administrative costs. They expect $25 billion in savings by shifting federal costs to states, better terms with EBT processors, cuts to education program and other administrative items. States currently pay 50 percent of administrative costs, and states will start paying 75 percent of those costs beginning in October 2026. States likely will look for ways to reduce administrative costs. They may do this by reducing staffing, which could make getting SNAP more difficult.
[RELATED: IGA CEO: ‘It’s the price of groceries, Stupid.’]
Impact on grocery stores: Little at first but over time expect more administrative costs to deal with fewer resources at the state level.
- The bill kills $5 billion in SNAP education. SNAP-Ed is evidence-based and helps people make their SNAP dollars stretch, teaches them how to cook healthy meals and lead physically active lifestyles. Data shows that people who go through SNAP-Ed leave SNAP more quickly, make better food choices, have fewer health issues and in the long run save the federal government money.
Impact to grocery stores: Little, though we should think about picking up the slack. Private enterprise can play a huge role in helping low-income Americans learn how to shop efficiently, save money and make smart food choices for their families.
- Finally, the bill counts on $2 billion in cuts over 10 years for SNAP benefits that went to a small and specific group of legal immigrants who classified for refugee status.
Impact to grocery stores: Low. Few people were on this program compared to the rest of SNAP.
Put simply, this bill provides a lot of different ways to get a big savings number. In my opinion, much of it is manufactured, but that is nothing new – politicians on both sides of the aisle have been using tactics like this to push through changes to programs forever. Big headlines now against changes that may or may not make a difference over 10 years seem to be a common way of legislating these days.
But some of these changes are real and will impact grocers and the entire industry – especially in low-income communities where 30 percent or more of the families are on public assistance of some kind.
If we roll it all up into short-term, long-term, real cuts and manufactured ones, it is probably at least a 5-6 percent cut in the short run, and less than 10 percent over time. That is a way more manageable number than where draft legislation first started. Kudos to IGA’s partners at NGA and FMI for helping to blunt the impact of SNAP cuts to more reasonable levels.
So, what can we be doing now?
- Remember that there are provisions for states to take on more responsibility for reducing the costs of SNAP. There may be some states where the optics of SNAP cuts would look good to their heavily conservative constituents, and they could choose not to participate. Now is the time to have a conversation with local representatives, the governor and state administration. There is a lot of misinformation about SNAP. Talk to them now about how the program really works.
- The new work requirements are likely to push older Americans aged 55-64 back into the workplace, looking for 20-hour-a-week jobs; this is good news for us. Working 20 hours a week in grocery stores and keeping their SNAP benefits intact helps grocers, helps them and helps communities.
- Not every community will feel these impacts. Low-income communities, urban and rural, seniors and those with disabilities will feel them the most. Independents often are the only retailers providing access to fresh food in these communities, and some stores have a third or more shoppers on SNAP. Think about incremental deals and savings; sign seniors up for digital coupons and loyalty programs; consider enhancing senior offers and discounts.
- Pick up where the federal government is quitting – training. If we can help shoppers feel more confident, they will spend more. Nutrition content, articles on how to make SNAP dollars go farther and loyalty programs can do what the federal government was trying to do, and we can do it better. Step up, build education into marketing plans, and we will attract more SNAP shoppers.