SNAP collapse threatens Walmart, Kroger and other retailers — millions could see price increases as a result

The ongoing U.S. government shutdown is now 31 days old, making it the second-longest in history. Although the economic pain from this has been accumulating for much of October, on November 1st it’s expected to be turned up a notch.

That’s because President Donald Trump’s administration originally decided not to tap into a contingency fund to pay for Supplemental Nutrition Assistance Program (SNAP) beyond this date.

SNAP benefits or food stamps, as they’re more commonly known, are a key pillar of America’s social safety net. Any disruption to the system could have far-reaching implications, not only for the program’s beneficiaries but also for retailers and consumers nationwide.

Here’s what is at stake.

Must Read

Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I’m almost 50 and have nothing saved for retirement — what now? Don't panic. These 6 easy steps can help you turn things around Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP

42 million Americans directly impacted

SNAP is the largest anti-hunger program in the country. Roughly 12.3% of the country’s population relies on at least some food stamps, which is 42 million people or nearly the size of Canada’s entire population, according to USDA data (1).

In 2023, roughly 83% of these benefits went to households with young children, seniors or people with disabilities, according to the USDA. “SNAP benefits are literally the lifeline that feeds us at the end of the month,” Juan Saro, SNAP recipient, told CNN (2).

Fortunately, the vital program has avoided any major disruptions for much of its existence — until now. Benefits haven’t lapsed since the system was launched during the Great Depression.

Efforts are underway to reverse this lapse as well. A coalition of 23 Democratic attorneys general and three Democratic governors is suing the Agriculture Department over its decisions to avoid using contingency funds to partially sustain the program in November (3).

Two federal judges, to date, have ordered the Trump administration to pay the benefits using contingency funds. Trump wrote about the court decisions on Truth Social (4) that he does “NOT want Americans to go hungry just because the Radical Democrats refuse to do the right thing and REOPEN THE GOVERNMENT.”

“I have instructed our lawyers to ask the Court to clarify how we can legally fund SNAP as soon as possible. It is already delayed enough due to the Democrats keeping the Government closed through the monthly payment date and, even if we get immediate guidance, it will unfortunately be delayed while States get the money out,” he wrote.

Story Continues

It’s not clear how the debit cards that SNAP beneficiaries use to buy groceries will be filled or if the orders will be locked up in the courts with appeals and legal review. It typically takes one to two weeks to reload SNAP benefits.

Meanwhile, 22 states have enabled emergency funding for either food banks or the program directly to keep the lifeline open for their residents, according to Axios (5). That means at least some families could avoid the worst-case scenario. But that still leaves millions of people in other states vulnerable, and experts believe the fallout could flow to retailers and families that do not rely on the program.

Read more: Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in ‘great wealth’. How to get in now

The impact on retailers

Food stamps are not just a benefit for vulnerable families, but a key source of revenue for retailers across the country.

Walmart alone accounts for 24% of total SNAP spending, according to market research data firm Numerator (6). That means that if funding for the program lapses, the retail giant stands to lose an estimated $2 billion.

Wolfe Research analyst Spencer Hanus estimates that discount retailers like Dollar General and Dollar Tree could also see a hit to mid-single-digit revenue if the program is suspended (7). Kroger and Costco are also exposed.

Although the impact on grocery prices is difficult to predict with precision, David Ortega, professor of food economics at Michigan State University, told Reuters that some retailers could raise prices to preserve their thin margins if SNAP funding lapses (8). In other words, ordinary families could face higher grocery bills to cover the shortfall.

Workers are impacted too. Nearly one-third of Amazon’s warehouse workers relied on at least one publicly funded assistance program, such as SNAP, in 2024, according to a recent report (9).

Put simply, if the funds run dry or face reduction in November the ripple effects could indirectly impact far more people than just SNAP recipients.

How to prepare

If you or your loved ones rely on food stamps, you could consider alternatives for the weeks ahead. Look for local state or municipal programs that offer food assistance or reach out to the local food bank.

You could also consider community pantries and church lunches to plug the gap. If you have the opportunity, stock up on non-perishable items with any available funds.

If your family doesn’t rely on the program, consider bolstering your grocery budget. It’s difficult to say if retailers will raise prices to offset the loss in revenue, but if they do, you may need a tighter budget for groceries.

Also, consider donating to a local food bank to help the community. The SNAP crisis shows how tightly linked our economy is — every act of support matters.

You May Also Like

Are you richer than you think? Here are 5 clear signs you’re punching way above the average American’s wealth Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and ‘anyone’ can do it 22 US states are now in a recession or close to it — protect your savings with these 5 essential money moves ASAP

Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

USDA (1); CNN (2); Washington Post (3); Truth Social (4); Axios (5); Numerator (6); CNBC (7); Reuters (8); University of Illinois, Center for Urban Economic Development (9)

This article originally appeared on Moneywise.com under the title: SNAP collapse threatens Walmart, Kroger and other retailers — millions could see price increases as a result

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

View Comments