Grocery stores and families getting pinched by reduced food stamps

worried grocery shopping
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Millions of Americans have seen a reduction in benefits through the Supplemental Nutrition Assistance Program -- formerly known as "food stamps" -- which were increased during the COVID-19 pandemic.

Earlier this year, the SNAP program ended its federal pandemic assistance, dropping monthly benefits by an average of $90 per person per household. The additional benefits have already stopped in 18 states and will no longer be issued after this month across the rest of the country.

The change doesn't just affect families trying to put food on the table-- grocery stores are feeling the pinch as well.

Major food retailers like Kroger and Walmart are bracing for a loss in sales with less SNAP money to spend, making it even harder to turn a profit with surging inflation, according to a CNBC report.

The outlet pointed to an analysis by Credit Suisse, which shows retailers rely on shoppers using their SNAP benefits as part of their sales projections. According to the report, about 13% of sales at Grocery Outlet, which operates mainly on the West Coast with a cluster of stores in the North East, come from SNAP recipients. That's followed by BJ's Wholesale and Dollar General at roughly 9% of sales, Dollar Tree at 7%, Walmart at 5.5% and Kroger at 5%.

During an earnings call with investors, Kroger CEO Rodney McMullen said the company is anticipating a direct hit from the reduction in SNAP benefits.

"We're hopeful that everybody will work together to continue or find additional money," McMullen said, per CNBC. "But as you know, because of inflation, there's a lot of people whose budget is under strain."

The combination of inflation and reduction of food benefits has left more families turning to food banks, which are also feeling the strain of economic pressures while trying to keep shelves stocked.

"We knew these [extra SNAP funds] were going away and they were going to be sunsetted," North Texas Food Bank CEO Trisha Cunningham told CNBC. "But what we didn't know is that we were going to have the impact of inflation to deal with on top of this."

More than 41 million Americans receive food-buying benefits through SNAP and rely on the benefits to put food on the table each month.

SNAP households have been receiving additional money for groceries since the USDA approved states to provide extra pandemic-related benefits in March 2020.

In 2021, households received another boost to their benefits -- between $12 to $16 per person per month -- as part of the Thrifty Food Plan, which re-evaluated cost-of-living adjustments and took into account today's food costs.

While the increase from the Thrifty Food Plan is permanent, as the emergency allotment comes to an end and SNAP benefits return to normal amounts, many households will see a substantial change to their monthly benefits.

Featured Image Photo Credit: Getty Images