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Wal-Mart to Widows Will Feel U.S. Food Stamp Cuts Starting Today

November 1, 2013

Nov. 1 (Bloomberg) -- Annie Crist says she dreads telling her two daughters that cuts in food-stamp benefits taking effect today means less chicken and fewer hamburgers for dinner.

And with deeper cuts looming as part of a possible U.S. budget deal, Crist and other recipients may feel an even greater pinch -- along with retailers such as Wal-Mart Stores Inc., Target Corp. and Kroger Co.

"I don’t bother them or worry them with adult issues or adult problems," Crist, a 30-year-old self-employed babysitter in Lancaster, Ohio, southeast of Columbus, said in a telephone interview. "But if they ask me, ‘Well, why can’t we get this? We always get this,’ how am I going to explain that?"

Food-stamp spending reached a record $78.4 billion in the fiscal year that ended Sept. 30, due in part to a temporary boost in benefits passed as part of the 2009 economic stimulus that expires today. Lawmakers battling over U.S. farm and budget policy are looking to cut deeper by tightening eligibility rules that could drop as many as 3 million people from the program.

With an estimated 8 percent of shoppers using food stamps, the impact will probably be felt most acutely by discount retailers such as Dollar General Corp., Family Dollar Stores Inc. and Wal-Mart, said Bryan Gildenberg, chief knowledge officer of Kantar Retail.

"You’ll find the effects will happen quite quickly," Gildenberg said. "These are shoppers that have probably already allocated their spending down to the dollar."

 

Few Extras

 

Crist said her budget leaves little room for extras. The $547 a month she received in food benefits for herself and her daughters, ages 13 and 8, will become $497 today, as a roughly 5 percent benefit cut takes effect nationwide. With utilities and other expenses, she said she will be spending less on fresh meats, fruits and vegetables at the grocery store.

Grocers say they’re watching the situation closely. "We’re a little concerned about the food stamp cut, I can tell you that," Dennis Eidson, president and CEO of Spartan Stores Inc., a Grand Rapids, Michigan-based grocer, said in a conference call Oct. 24. "That could be a meaningful event for us."

Kroger, the biggest U.S. grocery chain, said it doesn’t expect the food-stamp drop to affect its sales. "Customers may shift to spending more of their cash on food and less cash on other things," Keith Dailey, a spokesman for the Cincinnati- based company, said in an e-mail.

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RELATED TOPICS: Policy, 2013 Farm Bill

 
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