WASHINGTON — Proposed changes to the Supplemental Nutrition Assistance Program (SNAP) could impose more than $1.6 billion in upfront costs on food retailers and nearly $760 million annually, raising concerns about both the financial strain on stores and the disruption to food access for low-income families.
A new SNAP Restrictions Impact Analysis, prepared by Badger Metrics and released by FMI – The Food Industry Association, the National Association of Convenience Stores (NACS), and the National Grocers Association (NGA) - estimates that the reforms would require significant investments in technology, compliance systems, and staffing.
Up-Front Compliance Costs
- $1.0 billion for convenience stores
- $305.1 million for supermarkets
- $11.8 million for small-format grocery stores
- $215.5 million for supercenters
- Total: $1.6 billion
Ongoing Annual Costs
- $378.6 million for convenience stores
- $281.4 million for supermarkets
- $18.0 million for small-format grocery stores
- $81.1 million for supercenters
- Total: $759.1 million per year
The report warns that costs equal to nearly 4% of industrywide net income in the first year could undermine an already low-margin sector. Smaller retailers, particularly those in rural areas, face the greatest burden from new stocking, labeling, and replenishment requirements, while larger chains expect significant costs associated with technology and software integration.
In a joint statement, the associations emphasized that while retailers support healthier eating goals, the rules as written could backfire:
“Food retailers and convenience stores are committed to supporting efforts to improve the nation’s health, but the proposed restrictions represent significant new costs and operational challenges. Without clear guidance and adequate time, these well-intended changes will create unexpected difficulties for both retailers and the customers they serve.”
Margaret Mannion, director of government relations at NACS, said the scale of the changes is unlike anything retailers have faced before:
“These new restrictions are unprecedented. Without clear rules and the time to implement them, they will impose significant costs on all American consumers, not just SNAP participants.”
Peter Matz, director of food, pharmacy, and health policy at FMI, cautioned that fragmented state-by-state rules could harm shoppers most:
“We’re working diligently to prepare for this new reality, but a patchwork of state restrictions brings significant cost and operational hurdles – especially for smaller and rural stores – and can create confusion at checkout. Clear, consistent definitions and a more realistic timeline would help retailers successfully implement this new reality while keeping SNAP access smooth and dependable.”
Stephanie Johnson, group vice president of government affairs at NGA, highlighted the risk for independents and their customers:
“NGA’s members are committed to supporting the goals of SNAP and promoting healthy food choices, but the proposed restrictions present significant operational and financial challenges. We urge USDA to work collaboratively with food retailers to ensure that independent grocers have the clarity and time needed to comply, so that SNAP recipients can continue to have access to fresh, nutritious foods without disruption or confusion.”
The associations are calling on USDA to extend the timeline for implementation and provide clear national definitions of restricted foods. Without such adjustments, they argue, the rules risk raising costs for all shoppers, limiting SNAP participants’ access to nutritious foods, and creating unnecessary friction at checkout.
The full report is available online here.
