Retailers could face significant costs in implementing the proposed restrictions to the Supplemental Nutrition Assistance Program (SNAP), according to a new report.
The report from the National Association of Convenience Stores (NACS), the National Grocers Association, and the Food Industry Association entitled “SNAP Restrictions Impact Analysis,” said grocery and convenience stores could face $1.6 billion in up-front costs from SNAP restrictions. Industry groups estimate the costs will add up to nearly 2 percent of the 2024 net income for all food retailers.
In addition to up-front costs, the annual costs of maintaining compliance are nearly $760 million per year.
“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,” the group said in a written statement. “Without clear guidance and adequate time, these well-intended changes will create unexpected difficulties of both retailers and the customers they serve.”
According to the report, costs are being driven by technology update, software and point-of-sale system upgrades, and labor required to comply with stocking, replenishment and labeling requirements. Effects of the restrictions are likely to be more severe for smaller stores for which implementation to comply with state-level rules for item qualification will be time-consuming.
“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,” Margaret Mannion, director of government relations at NACS, said.