How Lapsing SNAP Benefits Could Affect Consumers and Retailers

Nearly 42 million Americans are days away from missing their monthly food stamp check as the government shutdown enters its 28th day.

The Trump administration said funds for the Supplemental Nutrition Assistance Program, or SNAP, would not be distributed if the federal government was still shut down on November 1. With little progress toward a resolution on Capitol Hill, Congress appears poised to miss that deadline.

Expiring aid would have a devastating effect on millions of households already struggling to afford food and force people across the country to seek help from food banks. Abandoning this spending would also have a ripple effect on the economy, from small grocers to large chains like Walmart and even retailers who sell discretionary merchandise.

There will be “an immediate effect on the purchasing mix” toward a lower profit margin on groceries and household essentials, as well as the potential for additional theft as food budgets dry up, Spencer Hanus, an analyst at Wolfe Research, wrote in a note to investors Monday. Low-income U.S. consumer confidence could also take a hit heading into the holiday season, Hanus said.

SNAP recipients received an average of about $187 per month in fiscal year 2024, according to government data. Of these beneficiaries, 73% live below the poverty line, which is currently $32,150 or less for a family of four.

After years of high food inflation and other recent impacts on the amount of government benefits, losing this aid would be a blow to many low-income Americans.

Consumers who use SNAP benefits to pay for groceries spend more and shop more often than other shoppers, according to Numerator data.

On average, a SNAP recipient spends $832 per month on groceries, or 20% more than a non-SNAP shopper, although the amount spent on each trip is on average 12% less, or about $20.80 per outing, the market research company said. SNAP shoppers visit more retailers per month at 6.6, compared to 6.1 for people who don’t receive assistance, according to Numerator.

Hanus said his company is seeing interest in Google searches for “food banks” and “food stamps” increase as SNAP recipients look for alternatives. While there is often a surge in interest in these terms as Thanksgiving approaches, he said “it’s up noticeably year over year, which implies that this consumer is feeling a shock here.”

The potential loss of aid due to the shutdown is the second recent blow to government food assistance programs for low-income Americans. The One Big Beautiful Act legislation passed by Republicans this year cuts SNAP benefits by about 20 percent.

Hanus estimates that the spending changes in the bill equate to a 1.5 to 2 percent impact on retail sector sales.

While there are different ways to look at the impact of a discontinuation of SNAP benefits on retailers, grocers will likely be impacted. And the effects could reach employees.

“Often, grocers’ staffing and inventory are scheduled around benefit cycles, so an interruption could result in reduced employee hours, loss of perishables and lower sales,” industry group National Grocers Association said in a statement. “Furthermore, when profits are restored, the resulting increase in demand could strain supply chains nationwide.”

The numerator data shows Walmart, Dollar General And Dollar tree are more likely to go to SNAP buyers, while Target, Costco And AmazonOwned whole foods are less likely. Hanus estimates that a high-single-digit percentage of Walmart’s sales are tied to SNAP, while Dollar General and Dollar Tree are in the mid-single-digit range.

But SNAP users spend the most each year on groceries at Walmart, followed by Kroger and Costco, according to Numerator.

Walmart is the nation’s largest retailer and grocer. It also captures significantly more SNAP grocery spending than its competitors, Numerator found. More than 94% of SNAP shoppers purchased food there in the past year, with an average annual spend of $2,653, or 26% of the cohort’s annual grocery spending.

Just under half, or 48.8%, of all SNAP recipients shopped at Kroger in the past year, spending an average of $1,687.67 per year, or 8.6% of the group’s total annual grocery spending.

Although membership is required to shop, Costco ranks third among places where SNAP users purchase groceries in terms of average annual spending of $1,482.98. Walmart-owned membership club Sam’s Club ranks fourth in spending share at 3.8% and offers discounted memberships to new members who verify participation in a government aid plan.

Walmart referred CNBC to the National Retail Federation, which said cutting food assistance funding “creates a crisis for millions of American families.” Albertsons referred CNBC to the Food Industry Association, which called on Congress to reopen the government and “ensure these vital programs remain reliable for those who must rely on them to get through difficult times.”

Costco declined to comment. Kroger, Dollar General, Dollar Tree, Amazon and Whole Foods did not immediately respond to requests for comment.

A total of 3.6% of in-store grocery shopping trips in the United States were paid for using SNAP or government benefits for women, infants and children from 2025 through September, down from 3.9% in 2024, according to Numerator. This share is down from the pandemic peak of 6.5% reached in November 2021, when an additional emergency allocation was provided.

However, more rides are funded by SNAP benefits today than before the pandemic, when between 2.2% and 2.8% of rides were purchased through the program in all months between February 2019 and February 2020.

If SNAP funding expires, recipients could also purchase fewer other goods.

“Less money in consumers’ wallets forces a reallocation of discretionary dollars toward food and more moderate spending overall,” Edward Kelly, a stock analyst at Wells Fargo, said in a note to investors last week. He noted that retailers reporting profits in November might say they saw lower discretionary spending during that month due to the expiration of food aid.

While there has never been a time when the federal government did not have a set aside for SNAP funding during shutdowns, states are beginning to step in. New York Governor Kathy Hochul is working on $30 million in aid for affected New Yorkers.

Additionally, missed SNAP benefits are expected to be paid in arrears once the government reopens – although it is unclear when that will be the case.

“We expect an eventual resolution to the government shutdown, which could represent a boon for low-end consumers during peak shopping season as missed payments are made up,” Kelly said.