Trump's Plan to Slash Food Stamp Assistance Could Impact Retailers
President Trump's proposed budget is expected to slash $193 billion from the federal government's Supplemental Nutrition Assistance Program, or SNAP, from 2018 to 2028. SNAP currently has an annual cost of around $70 billion. Should Trump's plan be approved by Congress, millions of Americans may be forced to bear the brunt of the drastic changes, with the impact trickling down to one group of companies that's already been seen struggling of late: retailers. The retailers most likely to be affected could include supercenters such as Wal-Mart and Target, dollar stores such as Dollar General and Family Dollar, and conventional grocers like Kroger.
Total Retail's Take: While not approved yet, President Trump's proposed cuts to SNAP have gained the attention of retail executives at companies that serve a large segment of low-income shoppers. Dollar General CEO Todd Vasos told analysts and investors on its recent earnings call that the reduction of SNAP benefits weighed on the retailer's same-store sales results for the latest quarter. Forty-three percent of dollar-store shoppers had an annual household income of $29,000 or less, according to Nielsen data, showing how much stores like Dollar Tree, Family Dollar and Dollar General depend on lower-income SNAP recipients for sales. We'll see if Congress passes Trump's budget; with the recent gridlock in Washington, I wouldn't expect retailers to have deal with this issue for quite some time — if at all.