Grocery Stores Target Food Stamp Beneficiaries

Supermarkets, which previously targeted high-end shoppers with Starbucks cafes and olive bars, now have a new audience in mind: food stamp recipients.

January 18, 2012

EDEN PRAIRIE, Minn. - For several years, grocery stores had been reinventing themselves to grab a bigger share of the high-end consumer, adding upscale coffee bars and in-store mini-restaurants and pubs, among other things. Now, the pendulum has swung in the opposite direction as several retailers are targeting a different shopper: food stamp beneficiaries, Bloomberg reports.

The federal Supplemental Nutrition Assistance Program (SNAP) increased its distributions by 11% to reach a record $71.8 billion in fiscal 2011, according to the U.S. Department of Agriculture (USDA). That translates into more opportunities for supermarkets and other retailers accepting food stamps to capture more of the SNAP pie. Around 85 percent of all food stamps are spent at big grocers and super centers, according to the USDA.

For example, some of Supervalu€™s Save-A-Lot stores now open at midnight when government benefits are placed on food-stamp cards. The chain also pushes bulk items at the front of the month, and promotes smaller sizes later in the month. Save-A-Lot has seen a significant bump in the amount of sales attributed to food stamps in the past two years, rising from 26% in 2009 to 40% in 2011.

"What we€™re learning how to do is to merchandise to those events," said Craig Herket, CEO of Supervalu. "You have to learn, market by market, when is that, and you have to merchandise to it, and in some cases, run your stores to it."

Walmart is another retailer that caters to food-stamp recipients by ensuring its stores are well staffed at midnight on the first of the month and its shelves are well stocked with canned goods and produce. "We are seeing customers on government assistance timing their shopping at the beginning of the month to the minute and the second" of when they have that month€™s benefits on the card, said Greg Rossiter, Walmart spokesman. "Some of them are doing shopping for the month or that night or that day,"

The increase in the number of food stamp beneficiaries has spurred an similar increase in the number of vendors that accept food stamps. The downside to the bump in recipients and retailers has meant a jump in food stamp fraud. In November, the USDA announced a crackdown on food stamp trafficking.

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